Debt and Equity SLP

    Examine the structure and activities in your organization and identify two projects or events that required an investment. One should be a ‘current project’ and the other long-term investment project.

    For each project or event, identify the preferable source of funding. You may not have access to the actual source of funding so limit your paper to the source YOU feel is most appropriate. Then explain why you feel that source is most appropriate.There are 2 specific learning outcomes: 1) apply business theories, models, and concepts to guide analysis of problems and situations and 2) utilize data driven analysis in making business decisions.

    The emphasis will be on understanding the preferable source of funding.

    •Identify two projects or events that required an investment.
    •Identify the preferable source of funding and explain why you feel that source is most appropriate.
    •Write 2-4 pages, showing computations and discussing the results.
    •List supporting references and cite sources.

    **Additional question: Many of the small “dot-com” companies got financing in the form of an instrument called convertible debt. This is like ordinary debt, in that it pays a regular (but slightly lower than you would expect) interest amount. But debtholders have the right to convert it to equity at some point in the future. Why do you think these companies chose this instrument? Do you think it was a good idea? Does convertible debt offer the same advantages to larger, more established companies such as Exxon Mobil? Remember: there’s no ‘free lunch’. If a company offers creditors an option to convert the bond into stocks it must be giving them something of value. It should get something in return… (You may browse for ‘convertible debentures’ on the web to help you out with this).

                                                                                                                                      Order Now