Overview

In this course, journal activities allow you to simulate actual activities in the field of finance. For example, you are asked to create emails related to specific scenarios. The sender, recipient, and subject line for these emails are not the focus of this activity. Instead, this activity focuses on the substance within the body of the email itself.

Directions

Imagine that you are a financial analyst at the corporation you selected for your final project. One of your peers from a non-financial department is confused about why capital structure is important. You have been asked to explain the topic in terms that are not too technical. In an email to your peer, address the following rubric criteria.

Specifically, you must address the following rubric criteria:

1. Explain the meaning of capital structure, cost of capital, and weighted average cost of capital (WACC) and how they relate to each other.
2. Explain how a company would use the cost of capital or WACC in making business decisions. Use an example to support your response.
3. Utilize vocabulary and explanations suitable for a non-expert in finance to understand the communication.