Discussion-Corporate Financial Structure
Though corporate capital structure (also called capitalization) and corporate financial structure are closely related, they do have some significant differences. Financial structure is determined from the full liabilities and equity position on the firm’s balance sheet, looking at the total liabilities, both long- and short-term and the equity used to fund the organization. Whereas corporate capital structure looks at the mix of equity and long-term liabilities—primarily debt. In other words, capitalization is the portion of funds raised by selling shares and financial structure is the portion raised by selling bonds.
Determining the optimal financial or capital structure for a domestic U.S. firm requires in-depth analysis of a variety of factors. For multinational or global firms, the analysis can be much more complex than for domestic business organizations.
As a member of the finance team for the MNC Getting Bigger All The Time, Inc. (GBATT ), you have been asked by the Chief Financial Officer (CFO) to lead a general discussion on some of the complications and different risks in capitalizing an MNC and managing its financial structure. The CFO has asked that you specifically cover the risks associated with currency denominations, economic and legal issues, and the different government roles.
The CFO recommended a couple of sites for gathering information.
Organization for Economic Cooperation and Development (OECD) http://www.oecd.org
International Monetary Fund (IMF) http://www.imf.org
Using the module readings, University online library resources, the Internet, and the sources cited above, do the following:
Explain, with examples, how risks associated with currency denominations, economic and legal differences between countries, and the different governments’ roles and attitudes toward business can affect MNCs’ risks, capital structure and financial structure decisions.
I need it done please by due date assigned July 5th 2018, comment on at least two of your peers’ responses.
Write your initial response in 300–500 words. Your response should be thorough and address all components of the discussion question in detail, include citations of all sources, where needed, according to the APA Style, and demonstrate accurate spelling, grammar, and punctuation
Do the following when responding to your peers:
Read your peers’ answers.
Provide substantive comments by
contributing new, relevant information from course readings, Web sites, or other sources;
building on the remarks or questions of others; or
sharing practical examples of key concepts from your professional or personal experiences
Respond to feedback on your posting and provide feedback to other students on their ideas.
Make sure your writing
is clear, concise, and organized;
demonstrates ethical scholarship in accurate representation and attribution of sources; and
displays accurate spelling, grammar, and punctuation.
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