What are some long term finance strategies? Give a brief example of how one might be used in practice.
There are numerous long term finance decisions that a company must make such as:
? How much debt and equity should the company carry?
? What is the right mix?
? What cash handling strategy should be used?
? How aggressive should they be in investing cash vs. investing back into the company?
? Will company value be maximized by going public or staying private?
? How should the company grow - organically (internal) or by acquisition?
? How should the firm treat its risk exposures to avoid a large financial loss?
? Should the company expand internationally?
? What risks are involved?
How a company will finance itself or its capital structure, is arguably the most critical decision it can make. To make this decision, the firm must know where it stands against its industry peers by comparing their financial ratios, where it stands with working capital, how its stocks and bonds rate in the marketplace, what its cost of capital is and have a thorough assessment of its cash flow. After analyzing all of these critical finance components, ...
7 Paragraph discussion of long-term finance strategies.