Raising Capital and Financing Decisions
Overview/Description
The goal of every financial manager is to maximize firm value and shareholder wealth. How does a manager reach this objective? To be successful, financial managers must be aware of the financing options available to them, and the procedures they must follow to begin financing. Most important, managers must be able to choose the best financing mix for their company.
Target
Audience
This course is designed specifically for business managers, financial professionals, and other business professionals who have the need to understand finance and investment in corporations, and to analyze their own businesses or the performance of another company.
Expected
Duration
3.0 hours
Lesson
Objectives:
Financial Markets- recognize the importance of financial markets to a company.
- determine the term structure of a security.
- determine the type of financial market used in a scenario.
Raising Capital through Financial Markets- recognize why it is important to understand the differences between debt and equity securities.
- calculate the bond valuation to determine the costs of using bonds.
- calculate the value of the common and preferred stock of a corporation.
- identify the advantages of raising capital through the processes of public offerings, private placements, and privileged subscriptions.
Cost of Capital- recognize the importance of determining the cost of capital.
- determine the costs of a firm's capital structure by calculating the market value of a firm's capital structure, and the investor's required rates of return.
- calculate the weighted average cost of capital of a company.
Dividend Policy- recognize why it is important for a company to understand dividend policy.
- identify the issues that must be considered by a company when choosing a dividend policy.
- choose the most appropriate type of dividend policy for a company, based on a scenario.
- choose the most appropriate form of dividend payment for a given scenario.
Determining Optimum Capital Structure- recognize the importance of choosing an optimum capital structure.
- determine if a firm should use debt or equity financing, based on the advantages and disadvantages of each source of financing.
- determine a firm's optimum capital structure, using a modified formula for the weighted average cost of capital.
Course Number: FIN0213