Thursday, November 21, 2019

Sources of finance Essay Example | Topics and Well Written Essays - 1250 words

Sources of finance - Essay Example As you grow, you may need to turn to alternate sources such as Venture Capital. Once you have achieved a financial track record, you can turn to other sources such as Asset Based Lending or Commercial Loans. The main sources of financing can be divided into: Roger Inman can use cash for his purchase of new computer or the following sources of financing, such as a small loan(notes payable), buy a computer on accounts payable (in this case computer company would have to finance the purchase). Or another solution would be to lease a computer. A firm can raise money for working capital by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise that the principal and interest on the debt will be repaid. First of all it is difficult to answer, because we do not know in which industry the company is, therefore we can not say what the optimal capital structure is. So, making a few assumptions, next sources of financing can be used: E) Euro Tunnel suffered trading losses in its first year of operation. If the company wanted to maintain its gearing ratio at the same level as previous year, what type of finance would it have to raise As the company is suffering losses it implies that retained earnings are going down, resulting in equity decrease, so the gearing rate is going up. In order to keep the leverage rate at the level of previous year, new issues should be issued in order to counterbalance the losses that a company is currently making. F) Carlton Holdings PLC has a

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