The Capital Structure Analyzer
4 fill-in slots · from The AI Prompt Handbook for MBAs
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Advise on how this company should be financed — the debt-versus-equity mix. Company: [DESCRIBE, WITH PROFITABILITY AND CASH-FLOW STABILITY] Current structure: [DEBT, EQUITY, INTEREST COSTS] The need: [FUND GROWTH / REFINANCE / ACQUISITION / GENERAL] Constraints: [OWNERSHIP DILUTION LIMITS, COVENANT WORRIES, RISK APPETITE] Analyse: 1. The trade-off: tax shield and lower cost of debt vs financial-distress risk 2. How much debt this company's cash flows can safely service 3. The effect on ROE, EPS, and risk of shifting the mix 4. What the choice signals to investors and lenders 5. A recommended range and the sequence to get there Ground it in this company's cash-flow stability — that, more than theory, sets the ceiling on debt.
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