Investigate the Capital Structure of Facebook Based on Financial Model
These authors contributed equally.
- 10.2991/assehr.k.211209.014How to use a DOI?
- Capital structure decisions; MM theory; Capital structure; WACC
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.
- © 2021 The Authors. Published by Atlantis Press International B.V.
- Open Access
- This is an open access article under the CC BY-NC license.
Cite this article
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 -