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

Accounting framework - convention of disclosure, Accounting Framework - Con...

Accounting Framework - Convention of Disclosure The doctrine of disclosure suggested in which all accounting statements should be honest and to that end, full disclosure of al

Describe the balance of payments identity, Describe the balance of payments...

Describe the balance of payments identity and discuss its implications under the fixed and flexible exchange rate regimes. Answer:  The balance of payments recognize holds that t

Procedure of measurement of future value, Procedure of measurement of Futur...

Procedure of measurement of Future Value If we are getting a return of 10 % in one year then what is the return we are going to get in two years? 20 %, right. What about return

Buy side analyst, How to Industry analysis and finally stock picking from B...

How to Industry analysis and finally stock picking from Buy-side perspective

Explain about routine functions, Q. Explain about Routine Functions? Ro...

Q. Explain about Routine Functions? Routine Functions: - The routine functions are Supervision of cash receipts and payments. Opening Bank Accounts as well as managing them Saf

What do you mean by average cost and marginal cost, Q. What do you mean by ...

Q. What do you mean by Average Cost and Marginal cost? Average Cost and Marginal cost: the average cost is the combined cost as explain above, but for the difference in the for

Define multinational corporations (mncs), What are multinational corporatio...

What are multinational corporations (MNCs) and what economic roles do they play? A multinational corporation (MNC) can be described as a business firm incorporated in one count

What do you mean by time value of money, Q. What do you mean by Time value ...

Q. What do you mean by Time value of money ? The concept of TVM refers to the fact that the money received today is different in its worth from the money receivable at some oth

Cash dividend, what is amount of cash dividend if investor buys share of 1...

what is amount of cash dividend if investor buys share of 100 at premium of 400.

Describe in brief about finance, Describe in brief about  finance Mana...

Describe in brief about  finance Managing this flow of funds resourcefully is the purview of finance. So we can describe finance as the study of the methods that help us plan,

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