Reference no: EM132827327
Discussion-Finance Organization and Long-Term Planning
Considering Genesis Energy's aggressive growth plan, Sensible Essentials suggested that its client should broaden the scope of financing beyond short-term loans and consider long-term financing options. These options would greatly enhance the ability of the operations management team to fund the capital investments and growth in operating expenses.
One option is selling more equity in the company. A public stock offering might be a possibility; however, a company as young and small as Genesis Energy might be hard to value. Sensible Essentials believes that another private investor might require preferred stock dividends in order to mitigate some of the financial risk. Another option is a long-term bank loan.
Acting as the finance expert for Sensible Essentials, respond to the following:
Determine the cost of debt and equity for Genesis Energy and its weighted average cost of capital. Go to www.yahoofinance.com and look under SEC filings. Use a US publicly traded company, such as Apple, Google, DuPont, etc.
Identify the sources of long-term financing for Genesis Energy.
Analyze the potential costs and benefits of each option.
Explain how relative risk (from the investor's perspective) impacts the cost of capital for Genesis Energy.
Determine the cost of debt and equity for Genesis Energy and its weighted average cost of capital.
Calculate the required rate of return for Genesis Energy using the capital asset pricing model (CAPM). What is the required return for Genesis Energy shareholders?
|
Product design and capacity determination
: How is process selection related to product design and capacity determination?
|
|
Organization always operated on ethical basis
: Using the same organization as a basis, has the organization always operated on an ethical basis in order to remain profitable?
|
|
Prepare for new business venture selling novels
: To prepare for a new business venture selling novels, Sheldon Ross enrolls in business courses at the local community college,
|
|
Project Management Lifecycle
: In the Project Management Lifecycle, Describe the different methods for closing or terminating a project.
|
|
Finance organization and long-term planning
: Considering Genesis Energy's aggressive growth plan, Sensible Essentials suggested that its client should broaden the scope of financing beyond short-term loans
|
|
Behavioral Heuristics
: Behavioral heuristics, such as availability, anchoring, vividness, storage, conjunction fallacy, and representativeness, all reflect behavioral traits,
|
|
Health policy formation and implementation
: To understand health policy, choose two aspects of health policy formation/implementation that are particularly challenging and explain why.
|
|
Leaders in health care work environment
: Identify and describe a specific example of health care research and how it is used by leaders in a health care work environment.
|
|
Compare the product and service design processes
: Compare the product and service design processes and explain why the two are different.
|