Accounting Paper

Use the company you for work or select a public company, and analyze the methods of operational and financial leverage that should be considered in determining whether to acquire another organization. Financial leverage includes internal financing, equity financing, bond financing, reducing dividends to increase internal cash flow, and using leasing to acquire capital assets with more leverage, thus conserving cash flow.

Operational leverage should discuss the appropriate cost of capital tools, including weighted average cost of capital and the capital asset pricing model. Interpret the various operational risks and how to mitigate them in your selection of operational and financial leverage decisions.

Describe any intangible and non-financial factors that affect your proposed financing and operational financing decisions. Present a recommended solution and the rationale behind your decision. Keep in mind that your solution may be a combination of operational and financial leverage.

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