Tyco Capital Structure Essay

CAPITAL STRUCTURE

Analyzing primary factors that influence a company?s capital structure

Dora I. Gonzalez

Devry University

What is the name of the company? What is the industry sector?

Name of the company is Tyco International Plc, who recently merged with Johnson Controls International Plc, in order to bring together the best-in-class product, technology and service capabilities across controls, fire, security, HVAC, power solutions and energy storage. They serve various ends markets including commercial buildings, large institutions, real, industrial, and small business and residential. Tyco International is a manufacturing and industrial services corporation

What are the operating risks of the company?

By definition,

This ratio is calculated by dividing (short-term debt plus long-term debt) by (short-term debt plus long term-debt plus shareholder?s equity). Based on data shown in page 70 of their 2015 Financials.

Total long term-debt = $2,159 million

Total Equity = $4,076 million

Financial risk = $2,159 / ($2,159+4,076) million = 34.63%

34.63% of Tyco International Plc?s capital structure consists of debt.

4. Does the company have any preferred stock?

Based on the Consolidated Statements of Shareholder?s Equity, year ended September 2015, in page 71, as shown in the statement, there are no preferred stocks.

5. What is the capital structure of the company: short-term portion of long-term debt, long-term debt, preferred stock (if any), and market value of common stock issued and outstanding? To compute for the market value of Tyco?s common stock issued and outstanding, I used the following data: Number of Tyco outstanding shares = 422,755,899 Stock Price as of November 6,2015 = $37.02 Total market value = $15,650,423,381

The information below summarizes the information presented in the balance sheet:

6. What is the company?s current actual