Business Financing and the Capital Structure

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.

Your assignment must follow these formatting requirements:

Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.

Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

Describe the characteristics and valuation of stocks and bonds, and how each is a key component in the financing of corporations.

Describe the key elements of the securities markets, and how the markets drive financial transactions, decision making, and risk analysis.

Use technology and information resources to research issues in finance.

Write clearly and concisely about finance using proper writing mechanics

The following is just the grading rubic

Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills, using the following rubric.

Points: 240Assignment 2: Business Financing and the Capital Structure

Criteria 

Unacceptable

Below 60% F

Meets Minimum Expectations

60-69% D

Fair

70-79% C

Proficient

80-89% B

Exemplary

90-100% A

1. 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.

Weight: 30%Did not submit or incompletely described the advice that you would give to the client for raising business capital using both debt and equity options in today’s economy. Did not submit or incompletely outlined the major advantages and disadvantages of each option.Insufficiently described the advice that you would give to the client for raising business capital using both debt and equity options in today’s economy. Insufficiently outlined the major advantages and disadvantages of each option.Partially described the advice that you would give to the client for raising business capital using both debt and equity options in today’s economy. Partially outlined the major advantages and disadvantages of each option.Satisfactorily described the advice that you would give to the client for raising business capital using both debt and equity options in today’s economy. Satisfactorily outlined the major advantages and disadvantages of each option.Thoroughly described the advice that you would give to the client for raising business capital using both debt and equity options in today’s economy. Thoroughly outlined the major advantages and disadvantages of each option.

2. Summarize the advice that you would give the client on selecting an investment banker to assist the business in raising this capital.

Weight: 25%

Did not submit or incompletely summarized the advice that you would give the client on selecting an investment banker to assist the business in raising this capital.Insufficiently summarized the advice that you would give the client on selecting an investment banker to assist the business in raising this capital.Partially summarized the advice that you would give the client on selecting an investment banker to assist the business in raising this capitalSatisfactorily summarized the advice that you would give the client on selecting an investment banker to assist the business in raising this capital.Thoroughly summarized the advice that you would give the client on selecting an investment banker to assist the business in raising this capital

3. 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.

Weight: 30%Did not submit or incompletely explained the historical relationships between risk and return for common stocks versus corporate bonds, and did not submit or incompletely explained the manner in which diversification helps in risk reduction in a portfolio. Did not submit or incompletely supported response with actual data and concepts learned in this course.Insufficiently explained the historical relationships between risk and return for common stocks versus corporate bonds, and insufficiently explained the manner in which diversification helps in risk reduction in a portfolio. Insufficiently supported response with actual data and concepts learned in this course.Partially explained the historical relationships between risk and return for common stocks versus corporate bonds, and partially explained the manner in which diversification helps in risk reduction in a portfolio. Partially supported response with actual data and concepts learned in this course.Satisfactorily explained the historical relationships between risk and return for common stocks versus corporate bonds, and satisfactorily explained the manner in which diversification helps in risk reduction in a portfolio. Satisfactorily supported response with actual data and concepts learned in this course.Thoroughly explained the historical relationships between risk and return for common stocks versus corporate bonds, and thoroughly explained the manner in which diversification helps in risk reduction in a portfolio. Thoroughly supported response with actual data and concepts learned in this course.

4. 1 reference

Weight: 5%

No references providedDoes not meet the required number of references; all references poor quality choices.Does not meet the required number of references; some references poor quality choices.Meets number of required references; all references high quality choices.Exceeds number of required references; all references high quality choices.

5. Clarity, writing mechanics, and formatting requirements.

Weight: 10%

More than 8 errors present7-8 errors present5-6 errors present3-4 errors present0-2 errors present