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A struggling company has a positive cash flow, the cash flow is minimal. If something does not change soon, the company will go under. The product development team has just created a new product that will not only save the company from financial demise, but the product will revolutionize how the industry does business. The problem is that the product is still two years away before it can be sold to the public, and you will run out of cash within the next six months. How would you propose obtaining the funds needed to keep the company alive and thriving for the next two years until you are able to see a return on the product development, and keep the stakeholders happy? Also, Weighted Average Cost of Capital relative to raising capital in bonds, bank notes, preferred equity and common equity must be addressed. Agency costs should be addressed relative to the leveraging of the firm. Optimal capital structure relative to WACC and valuation must be addressed as well.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91375931

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