2.2 22Firms traditionally make use of financial markets to raise either debt or equityfunding. Modern financial innovation has meant the rapid increase in financingoptions available to start up and smaller (SMME) firms.Required:Assuming a start- up or SMME, provide a breakdown of alternative sources ofcapital that might be available to a start-up / SMME (outside of a traditional shareor bond issue on the stock market).

2.2 22Firms traditionally make use of financial markets to raise either debt or equityfunding. Modern financial innovation has meant the rapid increase in financingoptions available to start up and smaller (SMME) firms.Required:Assuming a start- up or SMME, provide a breakdown of alternative sources ofcapital that might be available to a start-up / SMME (outside of a traditional shareor bond issue on the stock market).

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 2P

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Discuss whether the director’s view (Miss Kay) that issuing traded bonds will decrease the weighted average cost of capital ATC Bhd and thereby increase the value of the company. Discussion should consider from the viewpoint of:i. Traditionalii. Modigliani & Milleriii. Market imperfectionsiv. Pecking order theory
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