Financing, Valuation, and Rating Agencies

Business & Finance
Tutor: None Selected Time limit: 1 Day

  • Suppose you were given an opportunity to own a business of your choosing. First, briefly describe your business; then explain the most efficient way to raise capital to either start or expand your business. Provide support for your response. 
  • Determine at least two (2) key advantages of equity financing compared to debt financing options. Provide a rationale for your response. 
May 17th, 2015

My business brief introduction:-

I am opening a cupcake restaurant for kids. I will have video games and other toys. I will be serving cupcake and smoothies. My product is Cupcake.I am opening a cupcake restaurant for kids. I will have video games and other toys. I will be serving cupcake and smoothies. My product is Cupcake.My target market is 4 to 9 year old kids.I Will measure their need for my product and service with the help of questionnaire/ research work, meeting with customer, and interviews.

Way to raise capital:-


  • Equity financing ( invest from own pocket )
  • Debt financing ( loan from bank )

Two  key advantages of equity financing compared to debt financing options:-

Investing from the own pocket is better then take loan from the bank. Because in debt financing company is usually required to pledge assets of the company to the lender as collateral, and owners of the company are in some cases required to personally guarantee repayment of the loan.

The larger a company's debt-equity ratio, the more risky the company is considered by lenders and investors. So equity financing is better then debt financing.

May 17th, 2015

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May 17th, 2015
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May 17th, 2015
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