A Capital Structure Analysis for Crocs

Linyun Gong

Co-Presenters: Individual Presentation

College: College of Business and Public Management

Major: BS.ACCOUNTING

Faculty Research Mentor: Kakolyris, Andreas  

Abstract:

This study explores the optimal capital structure of the global casual shoe brand Crocs by simulating the weighted average cost of capital (WACC). The research analyzed how the changes in leverage beta affected the company's market value and helped determine its most favorable capital structure. As a well-known brand with strong market influence in the casual shoes industry, Crocs has been operating stably and has been a listed company since 2006 . Our analysis employs synthetic rating methods and utilizes publicly available financial data from Bloomberg to examine the capital structure response of Crocs under different hypothetical leverage scenarios. Existing research indicates that the relationship among capital structure, capital cost and enterprise value remains a widely discussed topic, as it is closely related to a company's strategic financial restructuring decisions. The main findings of this analysis will be presented and discussed in detail in this poster.