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Discussion?Finance Organization and Long-Term Planning-Considering Genesis Energy?s aggressive growth

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Question;Assignment 1: Discussion?Finance Organization;and Long-Term Planning;Considering;Genesis Energy?s aggressive growth plan, Sensible Essentials suggested that its;client should broaden the scope of financing beyond short-term loans and;consider long-term financing options. These options would greatly enhance the;ability of the operations management team to fund the capital investments and;growth in operating expenses.;One;option is selling more equity in the company. A public stock offering might be;a possibility, however, a company as young and small as Genesis Energy might be;hard to value. Sensible Essentials believes that another private investor might;require preferred stock dividends in order to mitigate some of the financial;risk. Another option is a long-term bank loan.;Acting;as the finance expert for Sensible Essentials, respond to the following;?;Determine the cost of debt and equity for;Genesis Energy and its weighted average cost of capital. Go towww.yahoofinance.com and look under SEC filings. Use a US;publicly traded company, such as Apple;Google, DuPont, etc.;?;Identify the sources of long-term financing for;Genesis Energy.;?;Analyze the potential costs and benefits of;each option.;?;Explain how relative risk (from the investor?s;perspective) impacts the cost of capital for Genesis Energy.;?;Determine the cost of debt and equity for;Genesis Energy and its weighted average cost of capital.;?;Calculate the required rate of return for;Genesis Energy using the capital asset pricing model (CAPM). What is the;required return for Genesis Energy shareholders?;Write;your initial response in 300?500 words.

 

Paper#52052 | Written in 18-Jul-2015

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