Abstract
The final project research paper will be about the capital structure of Google. The purpose of this research paper is to discuss the capital structure of Google in the past and how it is currently. The primary goal is to view and analyze Google’s finance and capital structure to determine whether the quality of the organizations liability structure exists or not. This paper will provide findings from utilizing various online tools to indicate the financial performance currently and over a period of time for Google. I will show capital structure theory, issues and debates to help understand the capital structure decisions that affect Google’s financial status. I will also show how the capital structure choices affect how Google’s profitability measures by reviewing the corporation’s profits generated by the shareholders. This research paper will also discuss the Modigliani and Miller’s capital structure theory as well as some criticisms of the Modigliani and Miller model. The methodology utilized for this paper will be through articles, other research papers, Googles website and other relevant websites.
Introduction
Google, Inc. which is an index member of the Nasdaq 100 is one of the most successful global technology dominating various countries of the world and its most popular marketplaces. They offer products and services that are centered on improving the way people connect along with networking information. Google strives in the market of online content for advertisers and for consumers. They offer their ad displays automated by an auction-based program designed by them (Reuters.com). Based on the consensus of the world population Googles equity is of the highest value because they are currently ranked as industry leader in market capitalization (Yahoo Finance).
Capital Structure Issues
A company’s capital structure is its mix of debt and equity. Most organizations utilize both the debt and equity to finance and grow the company’s operations. The current financial standing of an organization is dependent on the level of debt and equity. Most companies try to stay within a target capital structure by using bot equity and debt (Ehrhardt & Brigham, 2014). Debt is gained by corporations which need extra funds to purchase items or fund projects that it cannot normally afford only utilizing their operating capital. A few examples of debt are bonds, loans, and commercial paper. The assets the company owns after all the debts are paid off and the equity a stock or other securities that represent the
