Corporate Finance discussion paper 2

• Bedrijfseconomie
• WO
• Studiejaar 3

Discussion paper 2

Capital structure decisions: 

What Spanish CFOs think

Please make groups of 4 students

You only need 1 mobile phone per group to participate

We will discuss 5 questions/statements

Each group can discuss with each other for 2 minutes, then answer the question and we'll start a discussion. 

Sign up via the following QR-code in the next slide

Imagine you're the CFO of Apple (with 33% debt ratio), what will be the most important funding source for you?

Retained earnings

Bank debt

Commercial debt (operational B2B debt)

Shares

The article highlights the gap between capital structure theories and real-world corporate finance decisions. Do you agree that capital structure theories provide only a partial explanation for CFO decision-making? Why, why not?

Agree

Disagree

Which theory is applied more often by CFOs? And think about an explanation.

Pecking order theory

Trade-off theory

The article emphasizes the importance of financial flexibility as a key factor in CFOs' decision-making. How can a company maintain financial flexibility while also maintaining a target debt level?"

To which theory is market timing theory more related? Think about an explanation.

Pecking order theory

Trade-off theory

Thank you for your attention and participation!

On behalf of:

Ilse, Simon, Sander, Coen, Ershad & Jaron