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Finance & Accounting
Pages 3 (753 words)
1. Indicate the type of debt did Disney offers to the public for sale and discuss the various approaches Disney incorporated to ensure successful marketability of these securities…
The plans for investment in the company via debt were rolled out so as to offer the customers with suitable alternative investment scheme to invest in the company. The unsecured debt was issued under the existing agreements and the same was expected to be in line with the existing debt prevailing then.
It is important to note that unsecured debt notes issued to public involves significant amount of risk for the company as well as the investors. This is because from the perspective of the customer, the interest rate may be too expensive. As a result, if the company is unable to generate sufficient profits, the company’s cost of borrowings will eventually exceed the revenues which will further increase financial risk of the company. The company has however kept these issues in mind and taken appropriate measures to minimize the impact of such undesirable consequences that might be followed after issue of unsecured debt by making the offer more attractive to customers. The company believed that if the offer would be attractive then more people will be encouraged to participate which will further ensure successful marketability of these securities.
One of the initiatives taken by the company to increase the marketability of the securities was to reduce the entry load for joining the scheme. ...
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