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Essay / Research Paper Abstract
This 3 page paper examines the capital structure of Sysco Corp. looking at the make up of the debt and liabilities ands the equity. Using the 2005 annual accounts the paper calculates the cost of debt, the cost of equity and the weighted average cost capital (WACC). The bibliography cites 1 source.
Page Count:
3 pages (~225 words per page)
File: TS14_TEsyscocs.rtf
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Unformatted sample text from the term paper:
can look at the make up of both the debt and the equity to get a good picture of the capital structure of the company. There are different forms
of debt, structured and non structured as well as long and shot term debt. The short term debt is mostly unstructured and is seen as current liabilities. This is made
up of $1,795.8 million in accounts payable, taxes payable of $10.2 million, short term debt of $474.9 million, accrued liabilities of $742.3 million and other short term liabilities of
$434.3 million. Most of these will not be interest bearing, however, the short term debt and the other short term liabilities may have interest attached. This gives us a total
of current liabilities of $3,457.6 million. Long term debt tends to be more structured, there is a total of $956.2 million in long term debt and $1,095.3 million in
other long term liabilities giving a total of $2,051.5 million in long term liabilities. We can look at the make up of this in terms of cost and portion. Of
the long term debt 86% is at fixed rates averaging 5.6% and the rest has an average of 3.2%. However cost of debt includes all of the different types of
liabilities and as such without a basic breakdown of all these costs the most effective way of calculating the cost of debt is to take the interest that has been
paid and use this as a guide. Level of liabilities (a) level of interest repayment (b) Rate of payment (b/a x 100) 5,509.10 75 1.36% This is different than
the average cost of the structured debt, as it look a al of the different types of liability. Next we can look at the cost of equity. To use an
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