StudentShare solutions
Triangle menu

Corporate Finance and Related Ethical Issues - Essay Example

Nobody downloaded yet

Extract of sample
Corporate Finance and Related Ethical Issues

This study discusses that equity financing is considered to be less risky because the commitments related to cash flow is respected, but this results in the dilution of the earning, control and share ownership. Moreover, as it is already known the cost of equity is higher than the cost of debt. This implies that equity financing can double the hurdle rate. This study is also based on such concepts of funding and investment. Arthur Graham plc (AG) is a listed company which owns building merchant chains. It is located in the south of England. The company is mainly financed through equity, keeping in mind the organic growth of the firm. AG wants to acquire an unlisted company called Sandboy Ltd, which also owns building merchant chains. However, the problem is regarding the funding that AG has to make in order to acquire the company. The shareholders of Sandboy Ltd have demanded 25 percent of the market capitalization of AG, for acquiring their company, which was accepted by AG, as they found Sandboy Ltd. to be a good prospect for them. However, AG could not raise funds from its internal sources, so it has to find out ways to fund the acquisition. Moreover, all the three directors of the company have different opinion regarding the funding or investment process . In case of corporate financing there are certain principles that organisations have to follow before making investments. In this case AG plc will also have to follow such procedure. The structure of the firm is analysed, which means the management at AG plc will have to assess its organisational structure first. This includes assets in place and growth assets. The assets in place are those assets that are already with the firm and growth asset are those which the firm expects to acquire or invest in future. In order to finance such growth asset, the firm may raise money from investors or the financial institutions. The investors can be promised an interest that the firm will generate through cash flow. This  study highlights that in case of public companies, the means of debt financing is bonds, and equity is common stock. However, in case of privately owned companies, the equity is the savings of the owners, and debt is the loan taken from bank or financial institutions. AG plc is a public company, and as discussed, it may issue bonds, debenture or preference shares to raise funds, issue right shares, etc., to raise equity financing or a mixture of both, for acquiring Sandboy Ltd. In such case the opinion of the directors has to be considered.  ...Show more

Summary

This essay declares that organisations which aim to achieve their corporate goals do it through corporate investments and financing. Generally it has been noticed that either the fund is self-generated or assistance from the external sources are taken. …
Author : considinedoming
Corporate Finance and Related Ethical Issues essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Corporate Finance and Related Ethical Issues"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Marketing Planning
Beamish and Ashford (2007) suggest that should a company be serious about acting responsibly at ethical and social level, then it is highly imperative that there may be the marketing mix adoption. Some examples of ethical marketing include that product should meet safety standards and dangerous products should be removed (Beamish and Ashford, 2007 p.20).
3 pages (750 words) Essay
Law
The panels give best output when mounted horizontally and packed closely together. Therefore, the company claims to cover considerably more of the classical roof area and generate more electricity per rooftop than a conventional panel. Solyndra company currently encounters several ethical and legal issues and, therefore, they have incorporated into their system some specific laws or ethical codes to overcome the situation.
7 pages (1750 words) Essay
Corporate governance
Companies in recent years started giving greater emphasis on effective governance with a view to ensure competitive position, attract sufficient capital, guarantee sustainability, and combat corruptions. Corporate governance practices are associated with the development of financial markets, because higher level of governance in most countries are related to larger securities markets and lower costs of external finance (Tang and Wang, 2011, 47).
3 pages (750 words) Essay
APPLIED CONCEPT PAPER
The purpose of adding this literature is to provide an insight to what are the essentials that are critical for the businesses to consider when it comes to governing huge corporations. Similarly, maintaining good relationships with investors is vital to the success of the organization as they are the suppliers of finance when the company requires funds.
5 pages (1250 words) Essay
Business ethics individual written report
Nestle successfully implements all ethical policies. Critical discussion of the importance of business ethics Nestle is very serious in the implementation of the communities’ prescribed business ethics standards (Stevens, 2009). Admittedly, all companies are set up to generate revenues.
14 pages (3500 words) Essay
How does the rise of ethical consumers effect corporate social responsibility
ople may avoid buying a brand because of a news story about the company, people may buy particular products in order to promote the industry in developing countries, or they may choose eco-labelled products if they feel that environmental issues are important. “This type of
20 pages (5000 words) Essay
Evaluate the role of finance director in an organisation of your choice
The other titles of the finance director include Chief Financial Officer and Chief Financial and Operating Officer. In the United Kingdom, the term Finance Director is the more popular term used. The finance director must contribute to the attainment
6 pages (1500 words) Essay
Case study
With this new post she handles all the integrating financial and accounting functions related with the merger and acquisition. Currently the organization where Lisa works in has gone for a $10 billion acquisition. In this case Lisa has a clear cut
5 pages (1250 words) Essay
Ethical case
Lisa being ethical found herself unprepared for the different corporate cultures she would soon encounter. The acquired company approach to compliance with financial rules and regulations was not at par with the standards Lisa
4 pages (1000 words) Essay
The role of business ethics in the corporate environment

This report analyses the role of business ethics in the corporate environment from the individualistic as well as organisational viewpoints. The report is concluded by providing recommendations about how business ethics can be more stringently established as a part of corporate governance and self-regulation approaches to business conduct and individual behaviour. 

10 pages (2500 words) Essay
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
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Click to create a comment
Contact Us