The purpose of the Final Project Research Paper

Overview
The purpose of the Final Project Research Paper is to examine capital-structure theory, issues, and
debates, while showing how capital-structure choices affect a firm’s return on investment (ROI) and
its risk profile.
Directions
Your Assignment is to select a publicly-held company and to analyze its capital structure, applying the
theories and principles found in Chapter 15 of the text.
The structure of your research paper should include:
? A preview of capital structure issues
? Business and financial risks related to capital structure
? Modigliani and Miller’s [MM] capital-structure theory
? Criticisms of the MM model and assumptions
? Capital structure evidence and implications
? Estimating the firm’s optimal capital structure
A firm’s optimal capital-structure is that mix of debt and equity that maximizes the stock price. At any
point in time, management has a specific target capital structure in mind, presumably the optimal one,
though this target may change over time. For example, financial management may choose a 50%
equity financing [stock] and 50% debt [bond] financing.
Several factors influence a firms’ capital structure, including:
? Business risk
? Tax position
? The need for financial flexibility
? Managerial conservativeness
? Growth opportunities
Business risk is the riskiness inherent in the firm’s operations if it uses no debt.
This report is intended to be a capital structure analysis of your selected public company. Your paper
is intended to be an executive summary of your analysis, and is limited to a minimum of 5 – 7 pages
of text, excluding the title page, table of contents, graphs, charts, tables, etc.
This summary report of your selected company’s capital structure should convey the quality, depth,
and completeness of your capital structure analysis, without going into excessive detail. Unit 1 [GB550: Financial Management]

Please note that there is no Assignment due for this project in Unit 1. The first deliverable for
the Final Project is due at the end of Unit 3.
APA Style Required
The report should adhere to APA format. A minimum of 4 reference sources are required in addition
to the text.
Directions for Submitting the Final Project
Compose your research paper in a MS Word document and save it as Username-GB550 Final
Project-Unit#.doc (Example: TAllen- GB550 Final Project-Unit 5.doc). Submit your file by selecting
the Unit 5: Final Project Dropbox by the end of Unit 5.

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Unit 3: Final Project Assignment
There are three parts that are due in this unit towards the final research paper that is due in unit 5:
Part I – The Abstract
Part II – Table of Contents
Part III – Preliminary reference list
Part I – The Abstract
Research papers, theses and dissertations include an abstract—a short, concise summary of your
research. Your abstract should approximate 200 words.
The abstract should briefly:
? Establish the topic of the research
? Articulate the research problem, question, and/or purpose/objective of the research
? Indicate the methodology used
? Present the expected findings
? Present the anticipated conclusions
The abstract should include, if possible, the keywords of your research. An abstract generally
emphasizes the main findings and conclusions of the research study.
Part II – Table of Contents
Submit a brief one page table of contents, outlining the proposed structure, organization, and logic of
your graduate research paper.
Unit 1 [GB550: Financial Management]

Part III – Preliminary reference list
Submit your preliminary reference list, detailing your anticipated reference sources. A minimum of
four references are required, excluding the textbook. Sources should be from academic, scholarly,
refereed journals. Use of Internet-retrieved and cited sources should be minimized. Wikipedia,
dictionaries, encyclopedias or any open source Web sites are not permitted.