How to finance new building
Username56789The company you work for is considering building a new warehouse and manufacturing facility. The cost of the new buildings will be $6.9 million. Your manager wants you to decide how the company should finance the new building.
If you decide to finance the construction with debt, then list the type of debt you would encourage the company to undertake and what the anticipated cost of that debt would be. Incorporate current commercial interest rates.
The company currently has a double AA credit rating. List the advantages and disadvantages of securing a loan from your local financial institution. Also consider the advantages and disadvantages of securing your loan from an angel investor.
If you decide to finance the construction with equity, decide how much equity you will need to surrender in order to acquire the needed funds. Your company currently has 4 million shares outstanding and carries an estimated value of $24 per share.Write a 2-3 page paper that thoroughly addresses the above issues.
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