Ratio Case

Published: 2021-09-10 10:45:08
essay essay

Category: Business

Type of paper: Essay

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Hey! We can write a custom essay for you.

All possible types of assignments. Written by academics

1. Because Merit Enterprise Corp would need $4 billion, so I think that it might long-term loans from banks. Pros: A. Financing fast; compared to issued stocks and bonds, long-term loans simple procedures and spent short time to get borrowing. The Merit has good relationship with a bank as the article said a bank had served Merit well for many years with seasonal credit lines as well as medium-term loans. B. Low borrowing costs; Merit to the long-term loans has the lower interest rate than bond rates generally, and since it is a direct financing, less financing costs. C. Larger borrowing flexibility; Merit negotiated directly with bank loan amount, interest rate, if some changes in the financial situation of Merit as also in consultation with banks again. Therefore, it is good for Merit to based on their financial situation to do operation. D. Loans to banks, Merit does not need to open the company's situation to the public, the confidential role.
Cons: A. High risk; burden of loan has a fixed interest rate and a fixed repayment period, $4 billion is a huge number if Merit does not run well during this time, it might result Merit cannot repay and even bankruptcy. B. Limited number of loans; the $4 billion is very hard to loaned from one bank so it might need loan from a group of banks, it will result Merit cannot raise sufficient money at one-time. C. Restrictive provisions; some provisions may limit the operating activities of Merit and even affect future financing capacity.

Warning! This essay is not original. Get 100% unique essay within 45 seconds!


We can write your paper just for 11.99$

i want to copy...

This essay has been submitted by a student and contain not unique content

People also read