Enterprise Finance

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Enterprise Finance

Introduction

Most businesses are currently faced with challenges when it comes to financing their operations . There are diverse options to choose from and each has its own advantages and disadvantages . Companies that do not have access to advice from professionals sometimes find themselves making the wrong decisions when choosing the means of finance . Such decisions are sometimes very costly and have been known to lead to bankruptcy in some companies . There are two major financing options debt finance and

equity finance . This will choose one form of financing option from each category and then analyse it in detail . The will also give a brief conclusion and recommendation on the subject

Equity finance : Initial Public Offering (IPO

This is a form of equity finance that is used by companies , and involves raising capital through issuing shares or common stocks for the first time to members of the public . It is suitable for small companies that are looking for capital in to undertake an expansion strategy , or larger companies which have the objective of becoming publicly traded . The offering may take various forms which include best efforts , Dutch auction , bought deal , self distributing stock or firm commitment . The bought deal is most common in general IPOs , and is also called the traditional IPO , while the Dutch auction is common in on-line IPOs

Companies that are willing to undertake an IPO may choose to have an underwriter who will be responsible for floating...