Milestone Guidelines Assignment: Global Expansion Financing
Overview: For this first milestone, due in Module Seven, you will complete Section 3: Global Expansion Financing, which will outline how you will secure funding for the corporation you have chosen for your final project. This section will include information about available local financing, parent company contribution, and any additional financing the company will use for its global expansion.
Prompt: First, review the annual financial statements (Form 10-K) for your selected company. You can either retrieve the statements from the webpage SEC EDGAR Company Filings or directly from the company's website, often listed under "Investor Information." Second, review the Module Seven resources, which provide helpful links to financing information.
Finally, complete the Final Project Milestone Three section in the Final Project Template. The paper should outline the current capital structure for the selected parent company and the funding details for the new foreign subsidiary. You will need to research the potential sources of funding and determine how best to finance the expansion. Be sure to analyze the capital structure of the new company for debt financing, stock issue financing, or using retained earnings from the parent company.
Specifically, the following critical elements must be addressed:
• Section 3: Global Expansion Financing
A. Analyze the current capital structure of the parent company. This should be done using the current annual statements.
B. Determine the funding your corporation should secure for this expansion into a global market. For example, you need to determine if the company will finance its expansion by using debt, issuing new stock, or using retained earnings of its expansion. Look at the current capital structure and use it as a guide for the subsidiary structure.
C. Analyze the financing of the new expansion. Consider financial requirements and how foreign currency will be acquired. Since the company will need to have foreign currency (currency of the country it is expanding into) on hand from day one of the company operations, determine how it will obtain the foreign currency. What are the options of local financing-including any regulations on local currency reserves?
Be sure to refer to the Module Seven resources, additional course materials, and your own research to support your responses. Incorporate instructor feedback on this milestone into your final project, the global expansion proposal.