How do the three financing alternatives compare based on a FRICTO analysis, i.e., flexibility, risk, income (or valuation), control, timing, and any other considerations that you think may be important? In other words, you need to systematically go through the FRICTO criteria, and for each criterion explain which financing source would be the best, which financing source would be the worst, and which would be somewhere in between. Do not organize your answer by the financing type. Instead organize by the FRICTO criteria. Start with the F (i.e., flexibility) and look at flexibility for the three possible financing options. Then move on to R, and so forth. After you have looked at the three financing sources for each of the criteria, provide a recommendation for what Frischkorn should do about financing. A FRICTO document is posted on Blackboard that provides more explanation about the FRICTO criteria. You can find the link to the document on the left-hand side of the Blackboard page. 

IMPORTANT NOTE: 

When evaluating the financing alternatives be sure that you do not fall into the trap of evaluating them from the investor’s perspective. You are determining what would be good financing choices for the company. Your perspective needs to be that of the company. And be sure that you are using the FRICTO definitions. For example, don’t use your own concept for flexibility, the “F” in FRICTO.

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Building a capital structure that adds value to your companys operating performance is challenging because of the large number of judgments that must be made based on intangible evidence On the one ha... View the full answer