Running Head: Long Term Financing Alternatives
Long Term Financing Alternatives
Shellie N Phillips, Elias Hernandez, and Deborah Stewart
University of Phoenix
MBA 503
Joey Oliveri
March 19, 2008
Introduction
Firms need Capital to finance their assets. The need for long-term capital requires the firm to assure itself of having adequate capital at all times. Financing can be debt based, equity based or a mix of both. Debt is the cheapest form of financing, but it should be used only within reasonable limits, because use of debt beyond a reasonable point may increase the firm’s financial risk and drive up the costs of all sources of financing. This paper discusses the concepts of capital pricing models, debt/equity mix and dividend policy, evaluates various long-term financing alternatives and characteristics and costs of financial instruments, which are helpful to a firm intending to expand in the future.
Capital Asset Pricing Model (CAPM) with the Discount Cash......
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Approximate Word Count: 2541
Approximate Pages: 10 (260 words per double-spaced page) |