Explain with examples how the cost of capital is determined

Assignment Help Financial Management
Reference no: EM131211624

Managing Finance - Argosy University

The Genesis Energy operations management team was excited to understand the various options for securing financing to fund the rapid growth plans. The team was surprised by the cost associated with using funds supplied by others after accounting for risk of investments in its small but profitable company. Sensible Essentials explained how the cost of external financing can be calculated.

· Explain with examples how the cost of capital is determined.

· Calculate the differences in cost and risk. Explain why the costs and risks of external financing are important for the organization to understand.

· Explain why rapid growth plans are important to a small company. Would there be a more efficient way to fund a growing company? Why or why not? Justify your answer.

Write your initial response in 300-500 words. Your response should be thorough and address all components of the discussion question in detail, include citations of all sources, where needed, according to the APA Style, and demonstrate accurate spelling, grammar, and punctuation.

Reference no: EM131211624

Questions Cloud

What is the products contribution margin ratio : JTL MANUFACTURING markets a simple water control and timer that it mass-produces. During 2013, the company sold 696,000 units at an average selling price of per solution $4.20 per unit. The variable expenses were $1,900,080, and the fixed expenses we..
Evaluate all realistic market entry options : In this assessment, you will continue to use the country and focus organisation you worked on in Asst 2. Here you will develop the next steps in their international marketing plan. Part 1 requires you to evaluate all realistic market entry options..
Estimate the price elasticity of demand for its product : Explain why it is important for a business to estimate the price elasticity of demand for its product?
Major public-park projects with comprehensive irrigation : JTL MANUFACTURING has two major public-park projects to provide with comprehensive irrigation in one of its service locations this month. Journalize the activities from these job cost sheets in the general journal. Also journalize the other costs tha..
Explain with examples how the cost of capital is determined : Explain with examples how the cost of capital is determined. Calculate the differences in cost and risk. Explain why the costs and risks of external financing are important for the organization to understand.
Change in the market for orange juice : Show the change in the market for orange juice that is consistent with the following statement: "When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country."
What is the detection gain : An AM system has a message signal that has a zero-mean Gaussian amplitude distribution. The peak value of m (t) is taken as that value that m (t) exceeds 0.5% of the time. If the index is 0.7, what is the detection gain?
Return to the market failure : Response question: Return to the market failure you identified in week 2. What policy mechanism would be best to address it? Why would other mechanisms be inappropriate? Would there be potential side effects?
Develop and describe a strategic measurement scorecard : Develop and describe a strategic measurement "scorecard" that incorporates the financial measures applied in this course. Consider the prospect of new equity owners and explain why this is important.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd