Based upon the Learning Activities in Topic 2, the optimal capital structure is governed by a variety of factors, including taxes and the costs of financial distress. Compare and contrast the capital...

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Based upon the Learning Activities in Topic 2, the optimal capital structure is governed by a variety of factors, including taxes and the costs of financial distress. Compare and contrast the capital structure of JP Morgan Chase with one other non-banking member of the Dow Jones Industrial Average (DJIA) using at least five different factors described in Topic 2. Based upon the Learning Activities in Topic 3, why do some firms pay no dividends while others consistently pay dividends? In other words, what are the primary drivers behind the dividend decision? Based upon the last video in Topic 3, how will the market generally interpret a dividend cut combined with a stock repurchase? Video The Dividend Decision, James Tompkins - YouTube
Answered Same DayFeb 21, 2022

Answer To: Based upon the Learning Activities in Topic 2, the optimal capital structure is governed by a...

Khushboo answered on Feb 21 2022
122 Votes
The optimal capital structure is impacted by various factors and we have compared the capital structure of JP Morgan Chase with Apple Inc. which is listed on DJIA. The capital structure of JP Morgan is majorly financed from liabilities whereas Apple Inc. is financed from equity. The legal requirement is the most important factor for capital structure because as per legal requirement, the banking companies are having stringent regulations for capital structure. The taxes are higher in case of JP Morgan due to higher net income and there is higher savings of finance cost for Apple Inc. due to higher debt in capital structure. The...
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