Write an analysis in which you select two publicly-traded companies within the same industry and present the DuPont analysis for each of these companies.
Write a research report that outlines the topics –
- Explain how the debt has served to influence the ROE DuPont performance results for each company you choose, and then describe how volatility plays a role in the debt choices in the context of this DuPont analysis. Explore the factors that influence the valuation of equity.
- Consider each of the following capital structure theories: the trade-off theory, the signaling theory, the debt financing to constrain the manager’s argument, and the pecking order hypothesis.
- Describe each of capital structure theories, and then order them in terms of which theory you believe to be most persuasive down to which you believe to be least persuasive. Form arguments defending your rankings and reference and discuss related academic studies to support your position.