200 words conclusion

Conclusion

In closing, the effect of debt issuance has a positive influence on the stock valuation when it comes to Hightower, Inc. By implementing this change and repurchasing outstanding stock, the value of each share increases by $1.75. Also, this increases the worth of the organization proving that the move was a right decision made on behalf of the business. Hightower, Inc. will remain restructured this way indefinitely.

Conclusion:

When you reach a certain level of money debt-free is almost non-existent. Hightower, Inc. is making the right move by consulting what are their best options when dealing with the effect of debt issuance on stock valuation. “Significant impacts on a company’s capital structure are their market conditions. If the market is stressed, for a company to borrow money, the interest rate would be usually higher than they would want to pay. If this were the situation, a company might want to wait until market conditions return to normal before trying to access funds.” (Harris & Raviv, 1991).

After exploring the effect of corporate taxes through debt financing I have mixed feelings about the statement made by Harris & Raviv. Debt is inevitable and the solution has been revamped and revised as the corporate market progresses.

Reference

Harris, M & Raviv, D. (1991). The Theory of Capital Structure. Journal of finance, 46(1), 297-

355. Retrieved 6 July 2016 from