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Financing the Business Part 2

Financing the Business Part 2. Gearing and the Long-Term Financing Decision (Capital Structure). For Stockholders, More Debt Means Higher Reward + Greater Risk. Example with Scenario Analysis. Example Using Ratio Analysis (Text). Existing Business’s (past) Financial Statements.

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Financing the Business Part 2

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  1. Financing the Business Part 2 Gearing and the Long-Term Financing Decision (Capital Structure)

  2. For Stockholders, More Debt Means Higher Reward + Greater Risk

  3. Example with Scenario Analysis

  4. Example Using Ratio Analysis (Text)

  5. Existing Business’s (past) Financial Statements

  6. Investment (future) Plan

  7. Shares Issues (sales)

  8. Rights Issue

  9. QUESTION: If new shares are offered at less than their true (market) value, what happens to the share price after the rights issue? (See answer next slide)

  10. Other ways to issue new shares

  11. The Stock Market

  12. Why/Why Not List

  13. Short-Term, External Financing

  14. Short-Term vs. Long-Term Debt

  15. Small Business Financing: Private Equity

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