finance organization and long term planning 4016786 2

 

M 3 Assignment 1: Discussion—Finance Organization and Long-Term Planning

 

Considering Genesis’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 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:

 

  • Identify the sources of long-term financing for Genesis.
  • 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.

 

Write your initial response in 3–4 paragraphs in 400–600 words.  Apply APA standards to citation of sources.

 

By Friday, April 10, 2015, post your response to the appropriate

 

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Grading Criteria

 

Assignment Components

 

Initial response was:

  • Insightful, original, accurate, and timely.
  • Substantive and demonstrated advanced understanding of concepts.
  • Compiled/synthesized theories and concepts drawn from a variety of sources to support statements and conclusions.
 
   

Writing:

  • Wrote in a clear, concise, formal, and organized manner.
  • Responses were error free.
  • Information from sources, where applicable, was paraphrased appropriately and accurately cited.
 

 

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