Financial management analysis Essay Example | Topics and Well Written Essays - 2750 words

Financial management analysis - Essay ExampleThe loan taken by the go with is paid back at some future specified date. The interest at which the debt financing is done is called the address of debt Emmanuel (2012). In debt financing full monomania is retained by the company but the company has to repay the sum due on bonds issued or loan taken before repaying the honor investors. A company with high debt-equity ratio means a company which is highly leveraged or highly reared. According to Chandra (2011) the debt-equity ratio or leverage of a work firm influences the cost of capital and simultaneously the value of the firm. In order to form the desired capital structure a business should be ground on minimum cost of capital and maximum value possible of the firm. The portion of capital which is raised by sale of shares or stock is cognize as equity capital. This capital is owned by the shareholders and involves certain level of shareholders expectation on the investing made. I n order to retain the shareholder investment it is very important to ensure return in the form of dividend and appreciation in share price. According to Wiley (2007) the risk of the shareholders is comparatively more than the debt-holders however, in equity financing a distribution in ownership takes place. A company has two primary sources to raise its capital debt and equity. According to Graham (2012) to measure the cost of capital of a firm, WACC technique is used. This technique allows the company to determine the accurate cost of financing of any project by allocating suitable weightage to the different sources of pay available .Walmart Stores Inc. is one of the old and renowned names in the retail industry that has been serving the nation with different retail structures like cash and obtain stores, supercenters, apparel stores, bodegas, small discount stores, food and drugs, general merchandise stores and restaurants. The company is committed to serve the