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Finance

Long-Term Financing Paper
By
Ryan Buchzeiger, Gabriela Kelly, Jemilyn Vera-Ribaya, Christopher Perry
A Paper
Submitted in partial fulfillment of the
Requirements for Introduction to Finance and Accounting MBA 503
University of Phoenix Online
2009
Julio Jimenez

Long-Term Financing Paper
Your team has been asked to provide some long-term financing advice to a company that is considering expanding. Prepare a 1,400-1,750-word report to management (in proper APA form) in which you do the following:
a. Compare and Contrast the Capital Asset Pricing Model and the Discounted Cash Flows Model.
b. Evaluate the organization's debt/equity mix and dividend policy.
c. Describe the characteristics and the cost of various debt and equity instruments.
d. Evaluate long-term financing alternatives (e.g., stocks, bonds, leases)

Introduction
Team B has been asked….

Compare and Contrast the Capital Asset Pricing Model and the Discounted Cash Flows Model

Evaluate the organization's debt/equity mix and dividend policy

Describe the characteristics and the cost of various debt and equity instruments

Evaluate long-term financing alternatives (e.g., stocks, bonds, leases) (Contributed by Gabriela Kelly)
Companies are seeking to expand have been forced to raise capital and expand corporate debt due to factors related to“rapid business expansion, the inflationary impact on the economy, and, at times, inadequate funds generated from the internal operations of business firms.” (Block, and Hirt, 2005). To evaluate the long-terms alternatives an elaboration of bonds should be defined to understand the working details to determine the advantages and disadvantages of long-term financing.
The corporate bonds are the common long-term debt, the bonds redefined by specific agreements such as par value, coupon rate maturity date. For example, the terms of a bond look like this: par value of $1,000, coupon rate of 10% and maturity in 10 years. The key...