Assignment 2: Business Financing and the Capital Structure

Anonymous
timer Asked: Aug 9th, 2014

Question Description

Assignment 2: Business Financing and the Capital Structure
Due Week 8 and worth 240 points

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:

  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.
  2. Summarize 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.
  4. 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

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: 240 Assignment 2: Business Financing and the Capital Structure Meets Minimum Expectations Fair 70-79% C Criteria Unacceptable Below 60% F 60-69% D 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. 2. Summarize the advice that you would give the client on selecting an investment banker to assist the business in raising this capital. 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. 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. No references provided Weight: 25% 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% 4. 1 reference Weight: 5% 5. Clarity, writing mechanics, and formatting requirements. Weight: 10% More than 8 errors present 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. Insufficiently Partially summarized the summarized advice that you the advice that would give the you would give client on the client on selecting an selecting an investment investment banker to assist banker to the business in assist the raising this business in capital. raising this capital Insufficiently Partially explained the explained the historical historical relationships relationships between risk and between risk return for and return for common stocks common stocks versus corporate versus bonds, and corporate insufficiently bonds, and explained the partially manner in which explained the diversification manner in helps in risk which reduction in a diversification portfolio. helps in risk Insufficiently reduction in a supported portfolio. response with Partially actual data and supported concepts response with learned in this actual data and course. concepts learned in this course. Does not meet Does not meet the required the required number of number of references; all references; references poor some quality choices. references poor quality choices. 7-8 errors 5-6 errors present present Proficient Exemplary 80-89% B 90-100% A 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. Satisfactorily 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 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. Meets number of required references; all references high quality choices. 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. 3-4 errors present 0-2 errors present Exceeds number of required references; all references high quality choices.

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