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1. Business Organization Green Corporation (GC) is stock corporation engaged in the events management. The major customers of GC are companies engaged in concerts, trade fairs and expositions, weddings, corporate events and seminars in the different events centers in Metro Manila, Clark, Cebu and Davao. Due to the effects of the pandemic, GC would need to increase their capital to give them more funds to survive the economic challenges for the next 2-4 years. The original investors who control more than 50% of the stocks, fear that the company may not survive the pandemic if they did not increase their capital. The Board of Directors identified 3 options below to increase their capital and get additional funds: a. Enter into a joint venture with their competitor Blazing Company (BC). b. To sell additional preferred shares in the stock market. c. To sell additional common stocks in the stock market. Question: I. II. What option shall you recommend to your Board of Directors for the company to take and why did you choose this option? What would be the financial risks if the company chooses this option

1. Business Organization Green Corporation (GC) is stock corporation engaged in the events management. The major customers of GC are companies engaged in concerts, trade fairs and expositions, weddings, corporate events and seminars in the different events centers in Metro Manila, Clark, Cebu and Davao. Due to the effects of the pandemic, GC would need to increase their capital to give them more funds to survive the economic challenges for the next 2-4 years. The original investors who control more than 50% of the stocks, fear that the company may not survive the pandemic if they did not increase their capital. The Board of Directors identified 3 options below to increase their capital and get additional funds: a. Enter into a joint venture with their competitor Blazing Company (BC). b. To sell additional preferred shares in the stock market. c. To sell additional common stocks in the stock market. Question: I. II. What option shall you recommend to your Board of Directors for the company to take and why did you choose this option? What would be the financial risks if the company chooses this option

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Business Organization Green Corporation (GC) is stock corporation engaged in the events management. The major customers of GC are companies engaged in concerts, trade fairs and expositions, weddings, corporate events and seminars in the different events centers in Metro Manila, Clark, Cebu and Davao. Due to the effects of the pandemic, GC would need to increase their capital to give them more funds to survive the economic challenges for the next 2-4 years. The original investors who control more than 50% of the stocks, fear that the company may not survive the pandemic if they did not increase their capital. The Board of Directors identified 3 options below to increase their capital and get additional funds: a. Enter into a joint venture with their competitor Blazing Company (BC). b. To sell additional preferred shares in the stock market. c. To sell additional common stocks in the stock market. Question: I. II. What option shall you recommend to your Board of Directors for the company to take and why did you choose this option? What would be the financial risks if the company chooses this option
Transcribed Image Text:1. Business Organization Green Corporation (GC) is stock corporation engaged in the events management. The major customers of GC are companies engaged in concerts, trade fairs and expositions, weddings, corporate events and seminars in the different events centers in Metro Manila, Clark, Cebu and Davao. Due to the effects of the pandemic, GC would need to increase their capital to give them more funds to survive the economic challenges for the next 2-4 years. The original investors who control more than 50% of the stocks, fear that the company may not survive the pandemic if they did not increase their capital. The Board of Directors identified 3 options below to increase their capital and get additional funds: a. Enter into a joint venture with their competitor Blazing Company (BC). b. To sell additional preferred shares in the stock market. c. To sell additional common stocks in the stock market. Question: I. II. What option shall you recommend to your Board of Directors for the company to take and why did you choose this option? What would be the financial risks if the company chooses this option
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