Business Financing And The Capital Structure

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Business Financing and the Capital Structure
Throughout this paper I will attempt to give financial advise to a business that will have direct impact on operations and the ability to successfully compete in the marketplace. Some of the tasks involved in delivering sound advice to this business is the first task that consist of describing the advice that I would give to the client for raising business capital using both debt and equity options in today’s economy, while outlining the major advantages and disadvantages of each option. The second task involves the attempt to summarize the advice that I would give the client on selecting an investment banker to assist the business in raising this capital. The third and final task entails the
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How do you plan on financing the organization’s daily operation? Will you seek other partners that can pool their resources of money, property, equipment, knowledge, and business skills, which will help the business, grow in the future. And finally where would you like the business to be in the future in terms of the marketplace and value as a company. After these questions are raised and I receive the information from the client where they project the business’s future standing will be, I will then explain and define the concepts of the debt and equity financing options, afterwards I then will outline the major advantages and disadvantages of each option.
I first would explain to the client that capital structure in your business is the rate of capital (cash) at work in a firm. And there are two kinds of money that are relevant in the capital makeup of that business. There is debt and equity financing which from the standpoint of business you want to try to find an equal balance between the two to be successful in today’s economy. I will explain that each option has benefits and shortcomings in terms of risk and reward payment for investors.
So I explain to the client if you want to raise money to help establish the capital structure of the business by using the debt financing approach you would have to borrow money and repay it with interest by selling bonds, bills, or notes to
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