Issuer’s considerations, Financial Management

Assignment Help:

Issuer's Considerations

Cash Flows: Issuers may consider the period for which the funds are required and try to spread the borrowings in a way to minimize the costs. Generally, the requirements of funds will depend on the purpose for which the funds are raised.

Taxation: Issuers may have to assess the tax liability of the company and try to design the instrument in order to get the benefit of certain tax incentives for the company and to the investors. The attempt would be to minimize the tax liability of the issuer.

Leverage: Issuers may assess the debt to equity ratio of the company since excess of debt may burden the company with debt servicing. Further, in a falling interest rate scenario a debt contracted for a long-term will increase the cost of funds for the company.

Dilution of Control: Likewise, excess of equity will dilute the control over the company and this will be a disincentive especially if the promoters prefer the company to be closely held.

Transaction Costs: The instrument should have adequate liquidity so that investors costs while transacting are minimal.

Quantum of Funds: Issuers may target the investors based on the quantum of funds required and the time within which the funds are to be raised.

Maturity Plan: Depending upon the future requirement of funds and also on the availability of funds to repay the lenders, the repayment schedule of the instrument has to be designed.

 


Related Discussions:- Issuer’s considerations

Traditional mortgages, In US, savings and loan associations con...

In US, savings and loan associations constitute the major originating group of the traditional loans. What types of properties can be mortgaged?

Operating cycles, use the operating cycle to formulate a broiler business

use the operating cycle to formulate a broiler business

Define factor fx call or put option model price is function, List the argum...

List the arguments (variables) of which a FX call or put option model price is a function.  How does the call and put premium change with respect to a change in the arguments?

Offshore financial center, Offshore Financial Center It is a location w...

Offshore Financial Center It is a location with banking facilities to accept deposits and make loans in currencies various from the currency's country of origin. Banks located

Routine functions, Routine functions For the efficient execution of the...

Routine functions For the efficient execution of the managerial finance functions, routine functions have to be executed. Such decisions concern procedures and systems and incl

Principles of corporate governance, Principles of corporate governance ...

Principles of corporate governance Leadership: Every corporation should be headed by a proficient BOD which should exercise leadership, venture, honesty and judgments in dire

What is inventory turnover, What is Inventory turnover The shortcoming ...

What is Inventory turnover The shortcoming of this ratio is that average calculation based on beginning and year-end inventory may not represent actual average in year. Other l

Price Earnings, what is the relationship between industry pe and comapny''s...

what is the relationship between industry pe and comapny''s pe?

Federal reserve system, Federal Reserve System The central banking inst...

Federal Reserve System The central banking institution in the United States responsible for determining United States monetary strategy, including the setting of interest rates

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd