Table of Contents Page1. INTRODUCTION…………………………………………………………………………………………….22. THE EVALUATION OF UNILEVER CAPITAL STRUCTURE………………………………32.1 Why does Unilever use debt as the main source of financing compared to equity?....... ...........32.2 The downside of using debt which affects Unilever's financial strategy…….42.3 Evaluation of financial instruments…………………………………… ……………………..43. EVALUATION OF THE COMPANY’S DIVIDEND POLICY……………………….……………53.1 Unilever’s Dividend Policy………………………………………… ……………………… ………53.2 Signaling effect………………………………………………………………………………………. ..53.3 Unilever’s dividend payment preferences…… ……………………………………….64. RECOMMENDATIONS……..………………………………………………………………………………75. CONCLUSION………………………………………………………………………………………………………….8REFERENCEINTRODUCTIONThe rapid development of media and technology on the global market has helped businesses today to sell their products and connect with their customers more easily (Rayburn, 2012). However, the success of a business depends on many factors, not just the success of its advertising or marketing campaigns. The main objective of a company is to create shareholder value. According to Bender and Ward (2008), companies must manage both a business environment and a financial environment well to achieve this. Therefore, financial strategy can be considered as one of the most important factors contributing to business success, especially for a large company such as Unilever, as it involves strategic decisions related to raising and to manage funds in the most appropriate manner. Unilever is the third largest consumer goods company in the world, producing a wide range of food, home and personal care products. Behind sustained development on 8...... middle of paper ......nilever addresses A4S Forum 2012 [online] Available at: http://www.youtube.com/watch?v= K3aNmF816mU (accessed November 23, 2013) Unilever (2013) Dividend Policy [online] Available at: http://www.unilever.com/investorrelations/shareholder_info/dividends/ (Accessed November 23, 2013) Watson and Head (2010) Corporate Finance Principles and Practices (5th ed.) England: Pearson Education.APPENDICES1. Table on Unilever's debt ratio from 2010 to 2012Debt ratio 2010 2011 2012Long-term loansEquity + long-term loans 12,486 = 45.3%15,078 + 12,486 17,929 = 54.6%14,921 +17,929 14,635 = 48.2%157 16 +14.6352. Debt to equity ratio table used by Unilever2010 2011 2012Debt 26094/41172= 63.4% 32591/47512= 68.6% 30450/46166= 66%Equity 36.6% 32.4% 34%3 . Stock price