Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Chapter 18, Problem 14MC
Summary Introduction
Case summary:
Restaurant R, a family-owned restaurant chain based in Country A, has grown to the point where it is feasible to expand across the entire Southeast. The planned expansion would allow the company to raise new capital of approximately $18.3 million. The family would like to sell common stock to the public to collect the $18.3 million because Restaurant R's already has a debt ratio of 50 percent and because family members already have all their personal wealth invested in the company. The family, however, wants to retain power over voting.
To discuss: The some ways other than an IPO that companies can use to raise funds from the capital markets.
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Chapter 18 Solutions
Intermediate Financial Management (MindTap Course List)
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- Your corporation needs additional capital to fund an expansion. Discuss the advantages and disadvantages of raising capital through the issuance of stock. Would debt be a better option? Why or why not?arrow_forwardAll of the following are sustainable methods businesses can use to raise capital (funding) except for ________. A. borrowing from lenders B. selling ownership shares C. profitable operations D. tax refundsarrow_forwardWhat is the impact on stockholders equity when a company uses equity financing as a source of funding?arrow_forward
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