Financial and Strategic Management Essay Example | Topics and Well Written Essays - 500 words

Financial and Strategic Management - Essay ExampleFirms that are highly leveraged may non continue to pursue debt backing because they are already paying a lot of interest. One of the cons of debt financing is the payment of interest. A positive aspect of debt financing is that the firm does not relinquish any control (Richards, 2011). The use of loveliness financing can be used to raise money fast. One of the advantages of fairness financing is that firm is not obligated to pay back the principal and there are no interests costs associated with the acquisition of money through equity financing. A con of the strategy is that the common stocks sold in the open market by public corporations have voting rights which dilutes the power of ownership. There is no single formula to determine the appropriate mix for a particular project. The mix that impart be used by a company will depend on a variety of internal and external factors. For instance when the interest rates in the market ar e low companies are passing play to be more persuaded to increase the use of debt to finance projects. 2) Identify 3-5 sources of funding for projects. You may include budget allocations directly from governments or private sources of finance. What are their proportional advantages and disadvantages? There are many sources that can be used to finance a project. Five of those sources are common stocks, preferred stocks, bonds, governmental incentives, and retained earnings.