Discussion Post: Factors Influencing Capital Structure
Based upon the readings in this unit and your understanding of capital markets, discuss the following questions, also indicate a real world example using a company:
1. What difference is there between investors and the general public?
2. What role do investors play in the evolution of capital markets?
3. What role do financial institutions play in the capital markets?
4. What role do governments play in the capital markets?
5. What are the primary factors that influence decisions regarding the capital structure of corporations?
6. How do these factors change over time?
7. What markets do we refer to with the term "capital markets"?
Homework: Financial Markets and Institutions
INTRODUCTION
Sound financial markets and institutions are vital for economic success throughout the world. Capital markets are essential factors for economic development and production. The efficient accumulation and allocation of economic resources through primary and secondary markets provide the basis for efficient market economies across the globe. In this unit we will explore the factors that affect these markets and the effects these markets have on companies' decisions regarding capital structure and financial policy.
OBJECTIVES
To successfully complete this learning unit, you will be expected to:
1. Identify the most important factors that affect capital structure.
2. Identify markets used to create or modify a firm's capital structure.
3. Describe the importance of financial institutions in the performance of capital markets across the globe.
4. Describe the effects of government actions on capital markets across the globe.
Format your homework according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.
Reference
1. Nigrini's 2015 article, "Persistent Patterns in Stock Returns, Stock Volumes, and Accounting Data in the U.S. Capital Markets," in Journal of Accounting, Auditing and Finance, volume 30, issue 4, pages 541-557.
2. Öztekin's 2015 article, "Capital Structure Decisions Around the World: Which Factors Are Reliably Important?," in Journal of Financial and Quantitative Analysis, volume 50, issue 3, pages 301-323.
3. Korteweg's 2010 article, "The Net Benefits to Leverage," in Journal of Finance, volume 65, issue 6, pages 2137-2170.
4. Pasquariello's 2014 article, "Financial Market Dislocations," in Review of Financial Studies, volume 27, issue 6, pages 1868-1914.