What finance options are open to a fast growing UK Listed Maritime Assignment

What finance options be open to a fast festering UK Listed Maritime Company that is looking to expand - Assignment ExampleThe market failure may make grow from imperfect information fuelled by volatile economic conditions where lenders become risk averse. 1 Critical military rank of the difference between debt and equity from the perspective of a UK listed company Listed companies have a broad be sick of finance options available to them, which include debt and equity (Graham and Smart, 2009, p. 44). Companies utilize a blend of debt and equity funding to finance their operations. Companies bearing high credit ratings can borrow money at low interest, besides sell shares at a premium. Debt refers to money raised from banks and attachmentholders, while equity refers to money raised from the shareholders. In ante up for investing their money in a company, shareholders are rewarded with a percentage of the company (a share). Equity backing refers to issuing additional shares o f common stock to investors. The issuing of common stock decreases the previous stockholders percentage of ownership. Debt finance is often accompanied by strict conditions or covenants, besides having to pay interest and principal on stipulated dates. Debt Sources of Financing Debt financing incorpo charge per units collateralized bonds, leases, bank overdrafts, debentures, lines of credit, and bank loanwords. A bond refers to a written promise to pay back a certain amount of money on a stipulated date in the future. In the interim, bondholders receive interest payments at fixed rates on stipulated dates. Debt financing typically includes an interest rate of about 3-8% depending on thedebt and the arrangement. The face value, maturity date, and coupon rate are evaluated at the time the bond is issued (Morris, McKay and Oates, 2009, p. 328). The shareholders assume all the risks and rewards from debt financing. As a result, debt financing can be relatively less dear(predicate) com pared to equity finance depending on the expectation of the equity financiers. Equity Sources of Financing Companies usually seek swell from investors through the issuance of either common or preferred shares. Equity financing may as well incorporate employee stock options. Equity funding does not incur interest or have to be repaid. Debt financing is usually more risky compared to equity financing, although equity financing is more expensive (Gleyberman, 2009, p. 8). almost of the advantages of debt financing include interest payments being tax deductible and that there is no dilution of ownership to the alive equity holders. The disadvantages of debt financing include the fact that the debt holder has priority over the company assets during liquidation. Besides, in cases where the investor doubts the competency of the company to meet interest payments, investors may demand higher interests to compensate for the uncertainty. In addition, there are several covenants associated with debt instruments that may constrain a companys freedom of action (Albrecht, Stice, Stice and Swain, 2011, p. 507). In debt financing, loan repayment should be done on a predetermined date even if the business is in a loss. The cost to the company in debt financing is known beforehand. The cost to the company in debt financing is straightforward to predict, plan, and repay. Equity financing has several advantages such as no current payments due and no preferential rights on the companys assets. The process of raising funds through equity