StudentShare solutions
Triangle menu

Enterprise Finance - Coursework Example

Nobody downloaded yet

Extract of sample
Enterprise Finance

These shares are exceptionally risky. The advantages of ordinary shares are: 1) If there are good profits, dividends are paid at a higher rate. 2) Share value goes up in the stock market, increases profits. 3) Shares can be straightforwardly sold in the stock market. 4) Shareholders have a say in company management. 5) Capital raised by issuing of shares is not required to be paid back during company lifetime. 6) Regarding payment of dividends on shares the company is not liable. The demerits of ordinary shares are: 1) Uncertainty in dividend payment, shareholders get bonuses only when the company is making profits. 2) There is share prices speculation especially when bonus paid by the company is high. 3) Over-capitalization danger from miscalculation of long-term financial requirements. 4) There is a high degree of risks for the equity shareholders for instance, if the company is winding up, they are the last to be refunded. The other shares are preference shares. Preference shareholders enjoy several rights over ordinary shareholders; they receive a bonus at a fixed rate and regularly, capital is given back in case of wounding up of the company this means they are paid before ordinary shareholders. Preference shares are safe comparing with ordinary ones. From the above information, we can now easily differentiate between equity and preference shares. In preference shares, issuing of shares is not compulsory compared to equity shares where issuing of the shares is compulsory. In preference shares, paying of bonus are done before equity shareholders while, in equity shares, the shareholders are paid only preference shareholders. In case of closing up of a company, preference shareholders are refunded their capital before the equity shareholders, while the equity...
The disadvantages are:
1) Uncertainty: in order for a company to attract public to deposit their savings, it should have a credit rating that is high. Certain financial problems may arise from sudden deposits withdrawals.
2) Lack of security: there are no charges on the concerned assets by the public. Therefore, there is a risk in depositing savings with a company that is not very sound.
3) Obstruction of capital-market growth: lack of capital-market growth deprives the investor and the company good security benefits. This comes from more and more incoming deposits with the company hence less security investment.
4) Over–capitalization: this source of finance may lead to raising of more currency than is needed. This will lead a company to get involved in speculative activities or may be unable to put the funds to best use.
The fifth long-term source is, borrowing from banks. This involves acquiring of loans from banks and financial institutions. Lending between a bank and organization is dependent on trust and understanding amongst the two. Banks give loans for more than a year. Banks give funds to small-scale units.
Long-term borrowing from banks has some merits:
1) Flexible in nature this is seen when loans are repaid when the need is met.
2) Availability of finance for a definite period thus no burden.
3) Secrecy by banks on its clients’ financial operations.
4) Saves time and cost compared to shares and debentures.
5) No interference of internal affairs by the bank hence company control is retained by management.
Demerits of borrowing from banks are as follows:
1) When borrowing, personal guarantee or assets pledge is required, and an organization cannot raise more loans on these assets. ...Show more


Name Instructor Task Date Enterprise Finance In the life of any business, finance is its blood. Many businesses face financial difficulties, and they have to look for suitable income sources. Funds needed for a business can be divided into two; long-term and short term…
Author : dachcaden
Enterprise Finance Coursework essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the coursework on your topic
"Enterprise Finance Coursework"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

This means, buying the inventory directly from the manufacturer and then distributing it to various outlets in the city at a margin. The business therefore plays an intermediary role by providing a channel for distributing the manufacturer’s products to the consumers.
5 pages (1250 words) Coursework
Marketing coursework
However, the government has not put enough measures to develop the socio-economic situation of Ethiopia in order to eradicate poverty. First, Ethiopia is challenged by biophysical and water management issues. Challenges of water management are numerous thus affecting the ability of the country’s population to receive clean water for their use.
12 pages (3000 words) Coursework
This also increases utility in the economy as the amount of disposable income will rise. There are also some common secondary objectives of macroeconomic policies. One of these is sustainable growth. This means an increase in growth over a period of time and that which is not affected by the environment and other structural factors.
5 pages (1250 words) Coursework
Coursework 5
The second proposition establishes that a firm’s advantage has no effect on its weighted average cost of capital (i.e., the cost of equity capital is a linear function of the debt-equity ratio). The third proposition establishes that firm market value is independent of its dividend policy.
1 pages (250 words) Coursework
There are a number of benefits that exist when a company or hospital share its financial information with employees. The first benefit is
1 pages (250 words) Coursework
B. In case b, Money functions as a unit of account. It provides a standard measure of the relative value of goods and services. Money relieves Tim from extra costs he could incur in the valuation process. C. In the third instance, money
1 pages (250 words) Coursework
International finance coursework
b. Suppose that the United States is on a bimetallic standard at $35 to one ounce of gold and $3 for one ounce of silver. If new silver mines open and flood the market with silver, the two metals will circulate as before in the US since citizens could exchange
3 pages (750 words) Coursework
t that the changes in the figures from the original ones have led to net losses and also a negative margin of safety, this has been caused by the reduction in the cost of goods sold and also the reduction in sales volume due to low quality products. Therefore some of the measure
3 pages (750 words) Coursework
In general, the mean refers to the arithmetic average obtained by summing up all the score and dividing that sum by the total number of scores. This value is important when assessing extreme values because of its sensitivity to extreme scores in a small sample
5 pages (1250 words) Coursework
Statistical coursework
From the table results, we rejected Ho for 5 companies (AAL, CCH, EVR, RRS and VED company) since t-statistic was greater than the critical value. This implied that significant beta existed for these 5
6 pages (1500 words) Coursework
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Let us find you another Coursework on topic Enterprise Finance Coursework for FREE!
Contact us:
Contact Us Now
  • About StudentShare

  • Testimonials

  • FAQ

  • Blog

  • Free Essays
  • New Essays
  • Essays

  • The Newest Essay Topics
Join us:
Contact Us