You are the CEO of a publicly traded company that needs to raise $200 million in long term capital. Your Total Assets are now $1 billion and your debt is 35% of total capital. Your market direct cost of debt is 4% (interest) and your market direct cost of equity is 3% (dividends). Your business is in the 21% tax bracket. You need the capital because of expanding production requirements driven by sales:

1) What considerations must you make in determining how to raise the capital?

2) What is the process for issuing debt?

3) What is the process for raising equity?

Answer rating: 100% (QA)

1 When determining how to raise the required capital there are several considerations that need to be taken into account One of the primary factors to ... View the full answer