When should stock rather than debt to fund its operations?, Other Engineering

When should stock rather than debt to fund its operations?

There are several reasons for an organization to problem inventory rather than financial obligations. The first is if it considers its inventory price is filled, and it can increase money (on very good terms) by providing inventory. The second is when the tasks for which the money is being brought up may not produce foreseen money moves in the immediate future. A simple example of this is a start-up organization. The owners of online companies generally will problem inventory rather than take on financial obligations because their tasks will probably not produce foreseen money moves, which is needed to make regular financial obligations payments, and also so that the risk of the project is diffused among the organization's investors. A third reason for an organization to increase money by selling value is if it wants to change its debt-to-equity rate. This rate in part decides an organization's connection score. If an organization's connection score is poor because it is experiencing large financial obligations, they may decide to problem value to pay down the financial obligations.

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Posted Date: 3/31/2012 2:06:55 AM | Location : United States







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