1.Based on the information that you learned about capital structure and budgeting, determine what the optimal capital structure should be for Apple. You will need to determine how much equity (common stock) the company will offer in the IPO and how much debt the company should assume in their global expansion to meet the goal of $50 million.
Provide your recommendation in a 550-word APA formatted paper.
Determine what capital structure will work best with your initial assessment. Describe the structure using the ratios.
Include the dollar amount of equity (common stock) the company should issue in the IPO and how much debt the company should use for this expansion to reach the $50 million goal. Explain your rationale.
Note: there is no single answer to the question of the firm’s optimal capital structure. Your assessment is weighted more heavily toward your logical explanation rather than having the correct values for debt and equity.
2.Pull the annual report from Mergent Online for Apple:
Using an excel spreadsheet, calculate the following ratios from 2014-2016. How did you get these numbers?
- Total Debt to Equity Ratio
- Current Ratio
- Return on Equity (ROE)
What do the ratios tell you about your selected company?
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