Raising Capital: The Process, the Players, and Strategic Considerations
Learn about the decision frameworks financial professionals use to arrive at the company's optimal capital structure. Obtain a thorough understanding of the strategic considerations involved in raising funds for the purpose of investing in projects. Find out how capital structure decisions at the company level influence project decisions at the departmental level.
Firms routinely require access to external capital markets in order to fund capital and operating investments. Making complete, well-informed financing decisions at the corporate level requires a thorough understanding of capital markets. This course provides an introduction to the issues surrounding the debt-equity decision. It explains how decisions at the department or division level are influenced by capital structuring decisions at the company level and why changes in the industry and in the economy are important to investment and financing decisions in your organization.
This course goes beyond a standard theoretical treatment of capital structure to explain fully how characteristics of capital markets impact the process and prospects of raising capital. Through an exploration of the strategic considerations involved in creating an optimal mix of debt and equity, this course addresses questions about the process of raising funds and the appropriate amounts of debt and equity to raise.
Through it, you gain the insight you need to contribute to decisions in your own firm and obtain a more complete understanding of corporate restructuring, mergers, acquisitions, and bankruptcy.
Who Should Take this Course?
This course is designed for non-financial managers who are responsible for making integrated financial decisions and need a fundamental understanding of the process, players, and strategic considerations of raising capital.
Participants who complete this course will be able to...
- View the process of raising capital in a broad context of capital-related decisions regarding the mix of capital and the process of entering into capital markets
- Explain how decisions in your department or division are influenced by capital structuring decisions
- Explain why changes in the industry and in the economy are important to capital budgeting decisions in your organization
- Contribute to decisions in your own firm more meaningfully with a good understanding of corporate restructuring, mergers, acquisitions, and bankruptcy
Module 1 - Financing Choices and the Debt-Irrelevance Proposition
- The Optimal Mix of Debt and Equity
- Debt vs. Equity
Module 2 - Factoring Taxes into the Financing Decision
- How Debt Creates Benefits for the Firm
- Factoring Taxes into the Financing Decision
Module 3 - Financial Distress Costs
- Costs Due to Liquidation, Reorganization, and Shareholder Perceptions
- Structuring Debt to Mitigate Financial Distress Costs
- Fixed Rate vs. Floating Rate
Module 4 - Factoring Transaction Costs into the Financing Decision
- Underpricing and the Cost of IPOs
- Weigh the Costs for IPOs
Module 5 - Key Theories of Capital Structure
- The Pecking Order Theory Defined
- Introduction to the Trade-Off Theory
- Reconciling the Pecking Order Theory and the Trade-Off Theory
- Scott Gibson, Professor of Finance and J.E. Zollinger Term Professor, The College of William & Mary School of Business
- Steven Carvell, Professor;Academic Director of the Center for Real Estate and Finance, School of Hotel Administration