Monday, November 18, 2019

Financial problem Assignment Example | Topics and Well Written Essays - 500 words - 1

Financial problem - Assignment Example The mere affect of issuing share capital to general public would be fruitful as it solidifies the legal position of the Company by giving it the status of listed Company, if it chooses this option of finance. Furthermore, the dilution of control of the business would be shared as a result of share issuance to the general public who now become the owner of the Company. With respect to tax effects, the company would be more transparent as now it would directly come under the control of regulatory bodies of the country. However, as a listed Company, now the tax effects would be more on the Company’s part Another option available to meet the Company’s financial needs for business expansions is to acquire a long term loans from any banking or financial institutional channels. As, the company credit standing and financial position is quite strong enough to acknowledge the timely repayment of the loan principal and interest cost, thus, SMT could easily negotiate a loan and its terms from any well reputed financial institutions or banking channels. The legal status of the Company would not be affected as such due to such long term loans as these loans are meant to repay in the upcoming times. Moreover, the dilution of control would not be affected on account of these long term loan because of the same reason and lastly, the tax effects would be reduced on the part of Company as usually the tax authorities allows the interest cost as admissible expense in the tax income calculation. This option might result in huge cash inflows to C and C hydraulic, if considered to take into action. However, the disposal of any of its non profitable or loss incurring business assets would inject some of the cash flows towards the Company, which then strategically utilized to meet business expansion and growth requirements of the Company in an effective and efficient manner. There would be no possible implications on legal status and dilution of

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