What are the pros and cons of a debt financing option? How would you determine the right amount of debt for a company?© BrainMass Inc. brainmass.com October 16, 2018, 8:13 pm ad1c9bdddf
Taking on debt means borrowing money for your business.
CONS a debt financing
- Debt means relinquishing some cash profits.
PROS a debt financing
- Major benefit for debt financing, unlike with equity financing, you'll retain full ownership of your business.
- The interest on business loans is also tax-deductible, and
- You'll ...
The pros and cons of a debt financing option are explained.
External Financing options for a US MNE Company
Please describe each of the below options for a U.S. MNE looking to get external financing in the U.S. for an overseas Greenfield project. The topics that must be examined are:
Bonds, bank notes, effective tax rates, preferred equity and common equity should be addressed in your paper.
Agency costs should be addressed relative to the leveraging of the firm.
The optimal capital structure relative to WACC and the VL should also be addressed.
Please detail the advantages and disadvantages of each and give a recommendation of which option(s) to use.
Remember to only look at External financing in the U.S. for this project.View Full Posting Details