Identify the capital structure issues

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Question - Mini-Case - Marry is a newly appointed CFO in a listed Mid-Sized company in the food industry. The company financial performance is stable, with ROE is around 8-10%, which is above industry average;  EBIT (Operating Income) interest coverage is sufficient, while the company has some seasonality in terms of sales, thus has an impact on cash flows. Long-term capital financing the company bond credit rating is A-, which means easy to raise debt, the cost is lower than short-term borrowings.

Identify the capital structure issues that the CFO must address and explain the effects and significance of these issues.

Reference no: EM133017655

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