Paul Duncan, the financial manager of EduSoft Inc,. is contemplating the need to raise new capital, to grab a larger market share before an imminent shakeout of the education software industry. In this case study, the concepts of a preferred stock, warrants, and convertible bonds are discussed. Also, the cost of capital of a bond with warrants package and that for a convertible bond are explored, and the call option features of both financing options are discussed. In addition, the case study includes
Ownership- based warehouse finance: The first major issue relates to the legal status of a warehouse receipt and how it can be used to create a security interest in the commodity. In many countries, a warehouse receipt by itself does not convey ownership over the commodity. For instance, a warehouse receipt in the United Kingdom is a non-negotiable instrument. There are two ways for a lender to obtain a security interest in stored commodities through warehouse receipts, either to provide the lender
According to Gamble, J. & Thompson A. (2011), Countrywide Financial Corporation was formed in 1969 under the leadership of Angelo Mozilo. The goal of the company was to be the largest lender for real estate loans in the United States. The strategy was successful for a few years, but was ultimately doomed for failure due to very poor business practices. The detailed strategy was for Countrywide to be involved in five different segments of the banking business. The first and most important component
Miranda Bishop Accounting II Mrs. Morgan Debt vs. Equity There are two types of financing choices a company can choose from in order to expand a company. The first is Debt Financing. Debt Financing is when a company borrows money from an outside source, like a bank, with the promise of paying back the borrowed amount, plus the agreed-upon interest, at a later date. An example would be a company taking out a secured loan from a bank. These types of loans are paid back in monthly installments and
Chapter 1: Introduction 1.1 Background information: Initiating with the chain of operating cash flows, the company is required to utilize their assets in the business and whenever the company become able to pay their taxes, they started to provide money to their investors as dividend and to retain balance for their business by means of reserved incomes. If the corporation is financed through equity then all the income of the firms starts to flow towards the investors throughout as sort of reserved
The documentary movie Retirement Gamble is written by Marcela Gaviria and Martin Smith and produced in 2013. It gives a great insight on the problem of America’s pension funds that have diminished vastly. The problem of retirements’ savings is not only about people who close to their retirement, it is especially actual for the adults in their thirties and forties years. Most of them cannot afford to contribute monthly money for comfortable life in old age. Some people are planning to retire at a
almost everyone in their life. Finance professionals have the unique responsibility of managing assets and analyzing risks to ensure the future success of a company or organization. Though I ultimately chose to major in International Business as my undergraduate course, I also studied business, management, economics, and finance. These courses impressed upon me the importance of the financial sector in the economy. It is due to my understanding of the importance of finance and investment, coupled with
Literature review of finance in relation to strategic management Financial planning determines how managers carry out planning process in organizations so as to meet the business needs. An organization comes up with the right direction to take, goal set and how to meet the objectives therein. This is accomplished by gathering and data analyzation , implementation and evaluation and monitoring of results. The strategy to adopt must be figured out depending on the total cost. Strategic planning offers
businesses that have struggled to raise finance through loans or other conventional funding methods, but should make sure the idea is protected before putting it on a crowdfunding website. For instance, the cool New York project featured on Goodnet raised $273,114 through crowdfunding to build a filtered, floating swimming pool in the middle of the river. The advantages of crowdfunding are it can help to raise awareness for new business, it can be a fast way to raise finance and there are no upfront fees and
The term deficit spending means spending more than you make in a certain time frame. The dictionary defines deficit spending as, “the practice of spending funds in excess of income, especially by a government.” Deficit spending is borrowing money to buy something for example such as a mortgage on a house that you don’t have the funds to pay for right then and there and having to pay that money back long term with interest. In order for the US economy to grow, people work and in turn spend money therefore