Borrowing Aggressive And Finance Its Growth Against The Capital Invested By The Owners

Having a conservative debt policy increased the credit worthiness of the firm. Because the firm believes that the interest coverage ratio is a critical factor for credit rating agencies, they attempted to keep this ratio very high. Also, by having a higher credit rating they are able to access short term commercial paper borrowings at better rates. This type of short term borrowing makes up 47% of Diageo’s portfolio. By not having a strong credit rating they would not be able to lock in the low rates which would impact their business significantly.

Conducting business online using the internet has continued to experience significant growth over the last two decades. According to the Internet World Stats (2014) the number of worldwide internet users has grown from an estimated 16 million users in 1995 to 2.9 billion users in 2014. This world of interconnectivity has provided a way for people all around the world to communicate with one another in a real time format. The internet has removed the distance between governments, industries, businesses and individuals. This interconnectivity is helping to establish the foundation for a globalized community.

Due to high investment in fixed asset the firm also need a high amount of debt in order to cover its expenses so the smooth run of business.

Firms should however, use a lower debt to equity ratio than optimal capital structure suggests. The reason being, that an opportunity may arise where more funds are needed. As previously discussed, the issue of more stock sends a negative signal whether the signal is accurate or not, but to issue more debt past the optimal capital structure ratio would decrease the firm’s value which would also send a negative signal. Therefore, a firm should have a reserve borrowing capacity in the case of such an opportunity.

The Alibaba group has thrived in the Chinese e-commerce sector from its inception in 1998. They currently account for over 70% of online shopping in China and delivered annual revenues of $636 million in the 12month period ending June 2009 (case p1-2). Alibaba’s successes are due to multiple factors that have allowed them to create corporate advantage, and thus establish market leadership in China (Case p1). The configuration and coordination of Alibaba’s

Founded just before the turn of the millennium in Hangzhou, China, Alibaba Group has to date become the largest online retail website worldwide in the planet, its total transactions surpassing the sum of both Amazon and eBay’s (Erickson, 2013). The report explains its business and operation model and market strategy, before moving to explore the reasons for Alibaba Group’s success such as its established market share in the large market of Mainland China and its efforts to promote the perception of the reliability and security of e-commerce. Comprising of its future plans in logistics improvement, expansion into developing nations, integration with social networks, venture into mobile

This paper reviews the principal theories that have been proposed to explain IPO underpricing and discusses the empirical evidence. Theories of underpricing can be grouped under four broad headings: asymmetric information, institutional, control, and behavioral. The key parties to an IPO transaction are the issuing firm, the bank under- writing and marketing the deal, and the new investors.

In this report I will examine the case “Alibaba: Competing in China and Beyond.” Alibaba under the leadership of Jack Ma, its founder has transformed into one of the most successful e-commerce companies in China. In the 2000s Alibaba had emerged as the largest e-commerce company in China. The company tailored its strategies to meet the needs of the customers and made a mark because of its understanding of the Chinese language and culture. However, some

Alibaba is one of the biggest e-commerce companies in China that is founded by Jack Ma in 1999. Alibaba has changed the way of international business model, which is innovated and specialized by information technology. In this essay, it will be discussed that why was Alibaba a game changer, what were the conditions at that time that made it possible for succeed and why has it had a lasting impact by demonstrating the how the revolution of e-commerce industry in China conducted by Alibaba.

China has the world’s largest online populations with 130 million residential broadband accounts. E-tailing produced more than $180 billion in sales in 2012. The e-tailing industry in China has registered 120% compound growth rate since 2003. At the heart of this e-tailing revolution lies the Alibaba group, which is slated to go public in the United States as early as next month.

Alibaba.com is a trading platform mainly targeted for B2B businesses. It is. It links manufacturers from different countries such as China, United States, Thailand and others with buyers from all around the world. It enable the businesses to search and get for the products that they need from the largest manufacturing hub in the world-China. (Queena, 2016) The coverage of products is wide in terms of varieties and deep in assortments. Users are able to found beauty care products, food & beverages, electronic appliances, accessories and other products as well. The products specification provides the information of the products on their material, usage, feature and application. The payment method that mainly adopted by

Alibaba is the largest leading e-commerce companies of B2B online retailer in China and it is giving a trading platform that associates worldwide purchasers to huge number of small medium enterprises to conduct business in their network. The market operate by Alibaba

Alibaba Group Holding Limited is the largest China’s online business organization that gives purchaser-to-customer, business-to-buyer and business-to-business deals administration by means of online interfaces. This website started in 1999 when Jack Ma established the site, with the main objective of providing Chinese industries a major expansion to the outside world. It has its headquarters in Hangzhou, Zhejiang, China. In the year 2012, two of Alibaba’s gateway dealt with 1.1trillion yuan ($170 billion) in sales (Berkeley, 2013). At the shutting time on the date of its first sale of stock (IPO), 19th September, 2014, Alibaba’s reasonable worth was US $231 billion (Baker, Toonkel, Vlastelica, 2014). However, the stock has exchanged down

This report mainly discussed findings, methodology, and points from the paper: Sundaresan, Wang and Yang, 2015, “Dynamic Investment, Capital Structure, and Debt Overhang”. The model in this paper showed that firm’s growth-option exercising decisions and leverage policies are related to financing and anticipated endogenous default decisions. The paper also showed the framework for evaluating the influence on investment and financing decisions from the life cycle of the firm. Finally, debt seniority and debt priority structures were important to make leverage decisions and growth-option exercising.

Introduction: Alibaba Group Holding Limited is a Chinese e-commerce company that provides consumer-to-consumer, business-to-consumer and business-to-businesssales services via web portals. It provides electronic payment services, a shopping search engine and cloud computing services. Jack Ma founded Alibaba.com in 1999, a business-to-business portal to connect Chinese manufacturers with overseas buyers. In 2012, two of Alibaba’s portals handled 170 billion in sales. The company primarily operates in the People’s Republic of China (PRC), and at closing time, on the date of its initial public offering (IPO), 19 September 2014, Alibaba 's market value was measured as US$231 billion. However, the stock has traded down and market cap was $145 billion at the end of September 2015.