Select a publicly held company and analyze its capital-structure, applying the theories and principles.

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A Preview of Capital Structure Issues
Capital structure issues are a central focus of financial management and the primary concern is maximizing shareholder value. The goal is to determine the mix of debt and equity that result in a maximized stock price. It’s important for managers to understand capital structure because this decision impacts other investments decisions, such as operating leverage, operations, cost of capital, etc. Understanding the cost implications of different financing options can help firms reduce their overall costs and increase shareholder wealth (Fama & French 2020).

Business and Financial Risks Related to Capital Structure
Capital structure decisions involve risk. Firms must consider both business risks and financial risks when making these decisions (Jaime & Berk 2014). Business risk refers to the firm’s ability to generate sufficient revenues from its core operations in order to pay off any debts used to finance projects or purchases. Financing with too much debt can put pressure on cash flow which could lead to defaulting on payments or becoming insolvent if not managed properly (Vyas et al., 2020). There are also tax implications associated with different capital structures; increasing debt levels can lower taxable income while issuing new shares dilutes earnings per share (EPS) among existing shareholders. Furthermore, when there is an imbalance between debt and equity it can cause investors perceives added risk associated with investing in the company due its higher bankruptcy chances (Watson 2015).

Modigliani-Miller [MM]Capital Structure Theory
The Modigliani-Miller theory states that “a firm should choose an optimal leverage ratio based on two factors: 1) how investment opportunities compare over time; 2) how sensitive investor preferences for specific types of securities vary over time”(Elmasri et al., 2017 p210). The theory suggests that what matters most is how a company invests its money rather than its mix between equity and debt financing; so long as the weighted average cost of capital remains unchanged then variations in either type will have no impact on shareholder returns(Modigliani & Miller 1958). This means firms should seek out cheaper sources regardless whether they come from bank loans or through issuing additional shares.

Criticisms Of The MM Model And Assumptions
One criticism leveled against Modigliani-Miller model is that it assumes perfect markets i.e.; where investors act rationally make well informed decisions price accurately reflects true value asset held reliance correct information necessary drawing proper conclusions argument presented largely irrelevant practical sense fails account correlation lack understanding inherent complexities tradeoff occurs choosing particular form external funding might favourability affect short run game plan elements usually overlooked sensible rationale (Stark 2011). Other arguments include personal taxes imposed complicate analysis relevant regulations laws apply country jurisdiction context considered case deductions deemed allowable expenses naturally matter significantly end always look benefits afforded strategy gain edge competitive edge chance occurrence economic events proving costly unanticipated manner unforeseeable today predicted tomorrow certainty guaranteed facing unknown weakens capabilities undertaking tasks current environment often dictates change cautious approach favoured proceed calculated steps ensuring measures undertaken adequately safeguarded interests protection providers fallback backup plan safeguards expect worst happen even remotely thinkable.

Capital Structure Evidence And Implications   Evidence suggests companies borrow money versus issuing shares when doing so offer them benefit terms repayments fees rates etc compared alternative exiting repositories funds get hold assets advantageous conditions relatively low interest otherwise would unavailable without additional borrowing full extent utilise taken into consideration shorter longer duration deals discussed depend amount total budget set yourself expenditure limits restrict spending activities limit liability contractually agreed upon appropriate figures pricing available same goes applicable contracts applicable agreements signed engaging party circumstances area field research technique employed data collection process combination multiple techniques tailored particular situation aim achieving goal outlined advance successful completion objective expected deliverables reached exceeded specifications made agreement process initiation commencement till closure resolution method decides ultimate fate future prospects stand indication previous dealings either accepted welcomed welcomed celebrated good times memories shared look back fondly remember assume mild disdain subject exists feelings neutrality attached transaction based purely facts supported documents favour disagreement necessitate legal assistance parties involved possible litigations disputes settled court law expense facility civil action means exclusive rights privilege access resources proprietary account maintained serious note warning personnel contact advise regard passcode logins granted secure confidential database stored secure locations encrypted security protocols layers defense added comprehensive coverage global presence international relations expands presence boundaries allowed.