Fundamental of finance

Pages 9 (2259 words)
Download 0
Investment on Project B is ' 800,000 and that of the other projects is ' 1,200,000. As the projects are indivisible, it is evident that Top Choice has to take up Project B and any one of the other three projects, so that the total investment comes up to ' 2,000,000.


This portfolio is best suited for Top Choice as they are high risk takers.
The investment will yield an average return of (31.6% of ' 2,000,000) ' 632,000 with a standard deviation of (7.14% of ' 2,000,000) ' 142,800. This indicates that the return will be in the range of (' 632,000 - ' 142,800) and (' 632,000 + ' 142,800), i.e., ' 489,200 and ' 774,800 respectively.
A company can be financed by a number of different modes. The type of capital financing that has been chosen for the company is referred to as the capital structure of the company. A company can be financed using debentures, equity shares, long term loans, etc. These options however are based on the nature of risk the investors are willing to take. The following sections will discuss the various financing options that are available for investors to finance their companies and the factors that affect the choice have also been discussed.
a) Equity Financing: This is the most common mode of financing used by companies. Here companies raise monies for the business by selling stocks of the company. These can either be preferred or common stock and can be sold both to individuals as well as investors. This is also referred to as the share capital of the company. These stocks provide the buyers with an ownership in the company. This is perceived to be 'easy money' as it does not involve any debt. ...
Download paper
Not exactly what you need?

Related papers

Rajaratnam was entitled by the Forbes magazine as the self-made billionaire hedge fund manager and was also the 235th America’s richest men in the year 2009. As on 2009, the total net worth of Rajaratnam was over $1.88 billion. Thus, he was the richest Sri Lankan born entity in the world. He started his career business loan specialist to technology firms was working as the lending officer of…
Marketing fundamental
Discussion and Analysis A business organization or a corporation can market properties, places, products and services. In addition to this, experiences, ideas, events and information are also considered as marketable elements. It is important for an organization to develop a marketing mix to market these elements. Marketing mix consists of product, price, place and promotional strategies. Managers…
Fundamental of finance
This portfolio is best suited for Top Choice as they are high risk takers.…
Fundamental Finance
Significantly, its financial policy in the funding of its expansion in operational capacity is sound. It has a mix variety of funding sources: (a) from cash from operations, (b) long-term debt instruments, and (c) increase in paid up capital.…
Finance Industry
At present, debt factoring and debt subordination are the preferred means for companies to finance their needs for additional working capital. The financial flexibility provided by these two alternatives does not require the company management to relinquish any portion of their control or equity. They simply come with costs that then form part of the company's financing-related expenses.…
Islamic Finance
The central feature of the Islamic banking system is the prohibition in the Quran of the payment and receipt of riba, or interest. A closely related principles set forth in the Quran is the prohibition of gharar, or speculation. Both of these prohibitions were extended and elaborated on by the Prophet Mohammad through Sunnah. The Quran, which is the Islamic holy book, and Sunnah which are the…
Behavioural Finance
Human behaviour and personal investment decision making can influence the trading results of a stock market and therefore, it is relevant to discuss the role of behavioural finance in the investment decisions at stock market. With this background, this paper attempts to discuss the influence of behavioural finance on the stock market performance in general and on the market bubbles and crashes in…