Corporate Financial Analysis

corporate Financial Analysis Recommendation FIN/571 solemn 2, 2012 Corporate Financial Analysis Recommendation Investment in InterContinental Hotels Group, or IHG, to build a Hotel Indigo in greater China, requires $37 million in funding. To obtain the outstanding resources to finance the be of construction, in that location are triple alternatives IHG is considering. These include retained allowance, debt bonds, and a border loan as financing sources. The following includes a brief explanation of to each one sources, an optimal funding recommendation, a cash flow figure for the check, and a description of how the project get out computer backup successfully IHGs growth dodge. groovy Funding Alternatives long-term financing sources are either essential or external. intragroup options include retained moolah and external alternatives for IHG are debt bonds and bank loans. Retained Earnings Retained earnings are the profits reinvested in the com pany. Because the funds are already in fall upon they are an easy way for businesses to finance their project. Although there is no cash payment for use of retained earnings, there is a cost the opportunity cost (Emery, Finnerty, & Stowe, 2007). Putting the notes toward this particular(a) expansion project means foregoing opposite(a) uses.

Also, plowing the money back into the company means the investors will not start out their cash dividend distributions, which lavatory be upset to some parties. However, this manner quashs issue costs shamd with other means, and it does not involve shareholders or issues with a shift in control by issuing new shar! es. Retained earnings are an primal source of financing for IHG; however, it should remain restrict to maintain straitlaced cash flow and to pay shareholders dividends to avoid losing investments. The company can simply use the current count of retained earnings or employ a strategy to grow sales, sign expenses, a combination of both, or fall dividend payouts. Debt Bonds The liquidity of bonds makes...If you insufficiency to get a full essay, influence it on our website: BestEssayCheap.com

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