Write an analysis in which you select two publicly-traded companies within the same industry and present the DuPont analysis with
Write an analysis in which you select two publicly-traded companies within the same industry and present the DuPont analysis with five components for each of these companies. You can use the sample provided for the entertainment industry.
Write a research report that outlines the topics covering the following:
- 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. You can explain and calculate the costs of different capital components—debt, preferred stock, retained earnings, and common stock.
- 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 the 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.
Do not just answer the questions, but use the questions to formulate your report. Your paper should demonstrate thoughtful consideration of the ideas and concepts presented in corporate finance and provide new thoughts and insights relating directly to this topic.
Requirement:
- At least 3-4 pages, not including title, abstract, and reference pages.
- All papers must follow all APA requirements including an abstract.
- Make sure you have an introduction and conclusion.
- Do not use the first person.
Sheet1
Meta Platforms Inc. | |||||||||||
Five-component disaggregation of ROE | |||||||||||
ROE | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | × | Financial Leverage | |
Dec 31, 2021 | 31.53% | 0.83 | 1.00 | 40.11% | 0.71 | 1.33 | |||||
Dec 31, 2020 | 22.72% | 0.88 | 1.00 | 38.61% | 0.54 | 1.24 | |||||
Dec 31, 2019 | 18.29% | 0.75 | 1.00 | 35.12% | 0.53 | 1.32 | |||||
Dec 31, 2018 | 26.28% | 0.87 | 1.00 | 45.44% | 0.57 | 1.16 | |||||
Dec 31, 2017 | 21.43% | 0.77 | 1.00 | 50.67% | 0.48 | 1.14 | |||||
Comcast Corp. | |||||||||||
Five-component disaggregation of ROE | |||||||||||
ROE | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | × | Financial Leverage | |
Dec 31, 2021 | 14.73% | 0.73 | 0.82 | 20.36% | 0.42 | 2.87 | |||||
Dec 31, 2020 | 11.66% | 0.76 | 0.75 | 17.85% | 0.38 | 3.03 | |||||
Dec 31, 2019 | 15.78% | 0.78 | 0.79 | 19.55% | 0.41 | 3.18 | |||||
Dec 31, 2018 | 16.38% | 0.78 | 0.81 | 19.74% | 0.38 | 3.51 | |||||
Dec 31, 2017 | 33.11% | 1.50 | 0.83 | 21.56% | 0.45 | 2.72 | |||||
Walt Disney Co. | |||||||||||
Five-component disaggregation of ROE | |||||||||||
ROE | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | × | Financial Leverage | |
Oct 2, 2021 | 2.25% | 0.99 | 0.57 | 5.29% | 0.33 | 2.30 | |||||
Oct 3, 2020 | -3.43% | — | — | -0.79% | 0.32 | 2.41 | |||||
Sep 28, 2019 | 12.44% | 0.78 | 0.92 | 22.04% | 0.36 | 2.18 | |||||
Sep 29, 2018 | 25.83% | 0.88 | 0.95 | 25.14% | 0.60 | 2.02 | |||||
Sep 30, 2017 | 21.74% | 0.67 | 0.96 | 25.23% | 0.58 | 2.32 | |||||
Oct 1, 2016 | 21.71% | 0.65 | 0.98 | 26.64% | 0.60 | 2.13 |
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