Planning for doing research

Capital structure of Star Buck when economic got to a recession situation 1. Situation of research Capital of a firm is an important part of a company. It is influence the operation of the company in long term financing activities. In the long term financing the capital structure, it is involve three main factors: equity, debt and preferred stock. Today, all company base on those three factors to structuring their capital due to all situation of the economic to maximize their wealth, to maintaining their strength in operate all their economic activities. The big problem that every company face nowadays is what is the optimal debt/equity ratio in different economic proposes, namely recession, normal and expansion. 2. The central question of the research What strategies Star Buck should use to structuring their own capital in each situation of recession compared to expansion? 3. Followed substitute question How much the company should extend for debt in its capital structure to best suit with this economic condition? How Star Buck can minimize the WACC in order to maximize the value of the company in each type of economic condition? What policies that Star Buck using to taking the impact of financial leverage in their capital structure? 4. Procedures and method of the research In this research, we focus on some main ratio of Star Buck is debt/equity, the cost of the company (WACC). Furthermore, we also examine the impact of financial leverage on earning per share (EPS) and return on equity (ROE). To clarify the main question, we will analyzing the two substitute question by using different method of research. For first sub question, we plan to use literature study because we will use some theory in some books or journals which is about debt, equity and preferred stock. In addition, we also assume some example of some others company policies of using debt in companys capital structure. In the other two questions, we will use practical research since we want to analyze all the mentioned ratio to go through all the policies of Star Buck to know well how these all ratio affected by various policies of company in each situation of economy. Besides that through analyzing these ratio we will see the effective of these policies. To solve the problem of the central question and also sub question we will find information in some resources: For the literature question, we are going to use theory from authorized books which is relevant to the question, we as well as using information from economic journal to getting example, actual information about Star Buck or idea, comment of individual or organization about policies of Star Buck.

For the practical research, since we have to calculate all the ratio; therefore, we will get all material from Star Buck financial statement and relevant document which can provide precise information.