Long Term Debt

Identify and discuss the advantages and disadvantages of three types of long-term debt. Suggest to management which type of debt should be issued to obtain $5 million. Provide a brief explanation to support your suggestion

Sample Solution

Long Term Debt

Corporate debt has been increasing dramatically in recent years. Most people view debt in a negative light. However, with a little balance, debt can be beneficial. For this discussion, address the following:

Discuss the benefits and drawbacks of corporate debt.

Explain how financial managers can assess the company’s debt structure, and determine how reasonable it is.

Describe the factors one should consider when deciding if a company’s debt should be increased or decreased.

Sample Solution

Long Term Debt

Corporate debt has been increasing dramatically in recent years. Most people view debt in a negative light. However, with a little balance, debt can be beneficial. For this discussion, address the following:

Discuss the benefits and drawbacks of corporate debt.

Explain how financial managers can assess the company’s debt structure, and determine how reasonable it is.

Describe the factors one should consider when deciding if a company’s debt should be increased or decreased.

Sample Solution