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Assignment 2: Business Financing and the Capital Structure
Due Week 8 and worth 240 points
Businesses have to make many financial decisions that have a direct impact on operations and the ability to successfully compete in the marketplace. Base your writing on the information from the course coupled with information located in the Strayer databases or Internet.
Write a two to three (2-3) page paper in which you:
- Assume that you are financial advisor to a business. Describe the advice that you would give to the client for raising business capital using both debt and equity options in today’s economy. Outline the major advantages and disadvantages of each option.
- Summarize the advice that you would give the client on selecting an investment banker to assist the business in raising this capital.
- Explain the historical relationships between risk and return for common stocks versus corporate bonds. Explain the manner in which diversification helps in risk reduction in a portfolio. Support response with actual data and concepts learned in this course.
- Use at least one (1) quality references. Note: Wikipedia and other Websites do not quality as academic resources. However, you may use data sources, such as Yahoo Finance.