Index Page1. INTRODUCTION………………………………….22. THE ASSESSMENT OF UNILEVER'S CAPITAL STRUCTURE………..32.1 Why does Unilever use debt as the main source of financing compared to equity?….32.2 The disadvantage of using debt that affects Unilever's financial strategy…….42.3 Evaluation of financial instruments………………..43. THE EVALUATION OF THE COMPANY'S DIVIDEND POLICY…………….………………53.1 Unilever's dividend policy………………………………………… ………53.2 Signaling effect…… ………..………..53.3 Unilever’s preferences regarding dividend payments…… ………………….64. RECOMMENDATIONS……..…………………..…………………………75. CONCLUSION………………………………………………………………………….8REFERENCESINTRODUCTIONThe rapid development of media and technology in the world market today has helped companies to sell their products and to connect with their customers more easily (Rayburn, 2012). However, a company's success depends on many factors, not just whether it has brilliant advertising or marketing campaigns. The main objective of a company is to create value for shareholders which, according to Bender and Ward (2008), companies must manage well in both a business environment and a financial environment in order to do so. Therefore, financial strategy can be seen as one of the most important factors in contributing to the success of the company, especially for a large company like Unilever, since it involves strategic decisions related to raising and managing funds in the most appropriate way. Unilever is the world's third largest consumer goods company, producing a wide range of food, home and personal care products. Behind the sustained development of over 8...... half of the paper ......nilever Addressing the A4S Forum 2012 [online] Available at: http://www.youtube.com/watch?v =K3aNmF816mU(Accessed 23 November 2013) Unilever (2013) Dividend Policy [Online] Available at: http://www.unilever.com/investorrelations/shareholder_info/dividends/ (Accessed 23 November 2013) Watson and Head (2010) Principles and Principles of Corporate Finance Practices (5th ed) England: Pearson Education.APPENDICES1. Unilever debt ratio table from 2010 to 2012 Debt ratio 2010 2011 2012 Long term loans Equity + long term loans 12,486 = 45.3% 15,078 + 12,486 17,929 = 54.6% 14,921 + 17,929 14,635 = 4 8.2%1 5716+14.6352. Debt to equity ratio table used by Unilever2010 2011 2012Debt 26094/41172= 63.4% 32591/47512= 68.6% 30450/46166= 66%Capital 36.6% 32.4% 34%3. Share price