Comparison of Capital Structure and Weighted Average Cost of Capital of Sigma and API

Running Head: SIGMA AND API 0
Sigma & API

SIGMA AND API 1
Table of Contents
Comparison of the Capital Structure...............................................................................................2
Weighted Average cost of capital....................................................................................................3
References........................................................................................................................................5

SIGMA AND API 2
Comparison of the Capital Structure
Capital structure is the core component of any organization and it defines how well the
operations of the company are divided in the form of the debt and the equity. Debt comes in the
form of the long term notes payable and the bonds and the equity is classified in the form
common stock, preferred stock or retained earnings. Presently the debt of the sigma healthcare is
$793 and the equity of the Sigma Healthcare is $1201. On the other hand the Australian
Pharmaceuticals the debt is $100 and equity is 5 times that of debt which is $508 (DeAngelo &
Stulz, 2015).
Capital structure Sigma Healthcare Capital structure Australian
Pharmaceutical
s Industries
WEIGHTS WEIGHTS
DEBT 793 40% DEBT 100 16%
EQUITY 1201 60% EQUITY 508 84%
1994 100% 608 100%
From the above table it can be determined that the capital structure of the Sigma
healthcare reflects the weights of the debt and the equity in the ratio of 40% to 60%, whereas in
case of the Australian Pharmaceuticals Industries the weight of the debt and the equity is
16:84 (API, 2018). From the above information it can be reflected that the Sigma Healthcare is