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Question 2

Critically appraise how companies set their financing – both short-term and long-term policies, and explain the factors that a company should consider in setting its policies to raise capital for investment and in determining the level of debt equity balance to be maintained. The debt and equity financing strategy should be highlighted in detail. Support your arguments by reference to TWO FTSE100 firms in the SAME INDUSTRY. Your comments should incorporate both theoretical and academic arguments and real world practices. You should research the subject beyond the basic facts, and must provide calculations, references and critical commentary to support the points. You should also provide a brief introduction on the key issues and a conclusion consistent to your discussion.

Note: You can visit the link below to select one industry of your choice from the available list of industries. http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/indices/constituents-indices.html?index=MCX

Please note both the firms must come from the same industry. You are suggested not to use banks, and companies engaged in financial services.