68 for profit after taxes in 2002, much higher than the placement option. The EBIT/interest grows at exponential rates to reach 81.14 in 2002, but the EBIT / (interest + amortization), is only at 2.48.
With both alternative sources of finance, the company faces some operational, economic and financial risks. First of all, the operational and economic risks need to be considered. Indeed, if the company is borrowing long-term capital and the investments it makes do not prove viable, then the financial burden of having to pay off the sums that it has borrowed will be too much for the company to support itself financially. The projected cash flows are optimistic, but one also needs to consider whether they are realistic or not. At the same time, an IPO is risky before the public may not be ready for it and the capital would eventually not be successfully raised. As pointed out, the Mexican market is still somewhat shaky and confidence in this type of financial ventures is still reasonably low.
Despite these considerations, an IPO at $9 would be a reasonable attempt. The main argument to support this is the fact that the company is part of a stable and developed industry, something that appeals quite a lot to the investors on the market. Further more, despite the competitiveness of the market, the steel industry is so tied into other economic sectors that one is always bound to see a sustainable demand existing on the market. The financial figures are also constructed with an IPO at $9 and they tend to reflect financial stability and economic growth...
Business -- Corporate Finance -- Initial Public Offerings AVG is a state-of-the-art IT security company that has been very successful, has aggressively acquired other companies, does business worldwide, and is poised to use an IPO to raise capital. There is a question about whether a traditional IPO or a nontraditional auction-based method would be the better choice for AVG. The pros and cons of traditional vs. nontraditional IPO methods will be
Google and the IPO Process: Google's initial public offering or "IPO" is undoubtedly one of the hottest topics of the day. Like many initial offerings springing from well-known and successful companies, many investors harbor great optimism regarding the potential of the company in the IPO phase. However, like most initial offerings, Google's endeavor is full of several complex, unusual, and uncertain factors. Be that as it may, one must begin with
Business -- Corporate Finance -- IPO for AVG What type of IPO should AVG use -- a traditional IPO or an online auction? Based on your analysis and findings, what would you recommend to the executives of AVG? Explain your reasoning in detail. AVG Technologies N.V. is a "consumer-focused IT security" company seeking to "simplify, optimize and secure" the Internet for its users (AVG Technologies, 2013). Founded in 1991 and based in
1. Executive Summary EbonyLife Network is going public on the Nigerian Stock Exchange. EbonyLife has been a private company since 2013, but has quickly risen to the top of the Nigerian entertainment market by offering top-notch entertainment, stellar streaming services, critically- and internationally-acclaimed, in-house produced films, and a variety of shows in a range of genres for all demographics. Now EbonyLife Network is giving investors the opportunity to stake a claim
Business -- Corporate Finance -- IPO Facebook Provide a brief description of the company you chose, its main business and operational activities and a short synopsis of the main developments of the company over the past few years Facebook, Inc. is a global social networking company building and employing tools and applications for communication among its users on computers and mobile devices. Incorporated in 2004, Facebook, Inc. has approximately 5,299 employees and
Corporations Law Initial Public Offerings (IPOs) are the first time a privately held company sells its stock to the public. When such corporation needs to raise additional capital, it can either take on debt or sell partial ownership. If the corporation chooses to sell ownership to the public, it engages in an IPO (Initial Public Offerings, 2011, p. 1). Although it is difficult to get on the ground floor of an IPO
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now