Balancing Growth and Financing Decisions: Evidence from Lululemon

Junyao Li

Co-Presenters: Individual Presentation

College: College of Business and Public Management

Major: BS.FINANCE

Faculty Research Mentor: Kakolyris, Andreas  

Abstract:

This project examines how financing decisions influence firm value by analyzing Lululemon Athletica Inc.'s capital structure and growth strategy. The study explores how changes in financial leverage and market risk affect the company’s return and overall value. Lululemon is a popular, fast-expanding global clothing company, making it a suitable case for evaluating how an enterprise balances growth opportunities with financial stability.This analysis will use concepts from corporate finance, including stock and bond valuation principles, the capital asset pricing model, and cost-of-capital estimation. Moreover, this study will evaluate risk by analyzing financial and market data obtained from public sources and Bloomberg Terminal functions, such as beta and expected return. Financial concepts mention that capital structure decisions affect both risk and firm value. This project explains how financing choices can drive company growth while maintaining a low level of risk, and helps understand how financial management decisions contribute to long-term company performance. The findings are presented and analyzed in this poster.