Investigate the Capital Structure of Facebook Based on Financial Model

Xiangcheng He; Hanyu Li; Xiaoxuan Peng; Jingyi Yang

doi:10.2991/assehr.k.211209.014

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Investigate the Capital Structure of Facebook Based on Financial Model

Authors

Xiangcheng He¹^{, †}, Hanyu Li²^{, †}, Xiaoxuan Peng³^{, *}^{, †}, Jingyi Yang⁴^{, †}

¹Faculty of Social and Historical Sciences, University College London, London, WC1E 6BT, England

²School of Economic, Nanjing University, Nanjing, Jiangsu 210000, China

³School of Economic and Management, Tongji University, Shanghai, 200082, China

⁴International Business School Suzhou, Xi’an Jiaotong Liverpool University, Suzhou, Jiangsu 215000, China

^†

These authors contributed equally.

^*Corresponding author. Email: 1853375@tongji.edu.cn

Corresponding Author

Xiaoxuan Peng

Available Online 15 December 2021.

DOI: 10.2991/assehr.k.211209.014 How to use a DOI?
Keywords: Capital structure decisions; MM theory; Capital structure; WACC
Abstract: Capital structure decisions are important to the company. The capital structure is a combination of debt and equity used by a company to finance its overall operation and growth. Nowadays a company with a simple capital structure can hardly survive with the development of the market and society. As a result, it is quite significant to deeply study the structures and thus give more support to the company’s development. However, the questions we solved rarely consider the impacts of frictions and taxes. Based on the Modigliani and Miller theory(MM theory)and the concept of the weighted average cost of capital (WACC), we demonstrate the conclusion that the proportion of debt in a company’s capital structure makes no difference to the value of the company. This paper aims to help companies make better decisions and investments by estimating risks, returns, and the impacts from different capital structures on companies as well as the calculations of cashflows.
Open Access: This is an open access article under the CC BY-NC license.

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Volume Title: Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
Series: Advances in Economics, Business and Management Research
Publication Date: 15 December 2021
ISBN: 10.2991/assehr.k.211209.014
ISSN: 2352-5428
DOI: 10.2991/assehr.k.211209.014 How to use a DOI?
Open Access: This is an open access article under the CC BY-NC license.

Cite this article

ris enw bib

TY  - CONF
AU  - Xiangcheng He
AU  - Hanyu Li
AU  - Xiaoxuan Peng
AU  - Jingyi Yang
PY  - 2021
DA  - 2021/12/15
TI  - Investigate the Capital Structure of Facebook Based on Financial Model
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 86
EP  - 94
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.014
DO  - 10.2991/assehr.k.211209.014
ID  - He2021
ER  -

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