Financial Management: Choice of Financing Plans (Research Paper Sample)

Financial Management
Student Names
Institution Affiliations
Course Name
Professor Name
Date
When you consider two different financing plans, does being at the level where earnings per share are equal between the two plans always mean you are indifferent about which plan is selected? In your opinion, please explain how the earnings per share may impact your decision to consider the two different plans.
The equality point is the indifference measures concerning the earning per share. The indifference point debt funding level in which there is similar earning per share regarding the two financial plans is considered indifferent. This level beyond which we realize the financial leverage benefits begins its operation in association with the Earning Per Share (EPS). Every organization or company possesses the goal or aim of maximizing its market share; thus, the main emphasis point should be putting more effort into the earnings value. For example, now two plans are having the same earning per share tend to have very different ratios of price earning majorly in aspects characterized with differential risk components that possess a relationship with business debt. Businesses or organizations with a total commitment to the fixed cost concerning their activities engage in operating leverage. If the companies shift to the usage of debts to finance their operations, they tend to execute financial leverage (Arsal, 2021).
The earning per share is the most significant element that will influence my decision to consider the financial plans because of the following reasons: one is that earning per share is the measure of profitability. Profit stands to be the main issue in any organizations’ goals or objectives. About the fundamental analysis, earning per share stands to be the only metric responsible for the net income isolation to find out what amount the shareholders will gain after investing in the organization. Any company tends to come to the market to realize profits, and the investors emerge in the companies to be part of the company’s profitability. I will tend to look at the financial plan whose EPS possesses continuous growth; thus, profits will be increasing as time elapses. An EPS that possesses a growth curve means that the organization is creating value for the