Make a capital structure decision

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What important factors, in addition to quantitative factors, should a firm consider when it is making a capital structure decision? How do these factors play in the decision? Have you any examples from your own experience that you could share with others in the class?

Assume that you are the CFO of a company contemplating a stock repurchase next quarter. You know that there are several methods of reducing the current quarterly earnings, which may cause the stock price to fall prior to the announcement of the proposed stock repurchase. What course of action would you recommend to your CEO? If your CEO came to you first and recommended reducing the current quarter's earnings, what would be your response?

Reference no: EM1310266

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