Financial Options Paper
Running head: Financing Option Paper
Financing Option Paper
Introduction This paper discusses various methods available to organizations when seeking financing for special projects, namely a Casino / Resort hotel complex with a projected budget of $600M. The various methods described include the analysis of capital valuations modeling with respect to the cost of various debt and equity measurements available. Long-term finance alternatives are presented, as are the different sources of capital available to organizations. The paper concludes with a look at various cash management techniques needed by the Casino / Resort for operating as well as the various methods of short-term financing.
Capital Valuation Models Capital modeling provides common metrics for risk and reward analysis that can be used to compare the risk-adjusted profitability and the relative cost of capital for a wide range of capital sources. Modeling capital allows one to evaluate the overall capital adequacy in relation to the risk tolerances and profile of your business segments. To properly analyze risk, management needs to consider how they will determine and fund an adequate level of economic capital for a business venture, such as a Casino / Resort hotel complex. There is a need to develop an economic valuation methodology and model that is consistent and comprehensive. The intent of this capital analysis is to assist with performance assessment and decision-making. You will need to develop scenarios focusing on various sources of capital you intend to pursue. It is necessary to calculate both the weighted average returns of your capital scenarios, and the expected rate of return your investors will demand for the individual debt and equity instruments you are considering as capital sources.
One model that should be considered is the Capital Asset Pricing Model (CAPM). It is a formula based set of calculations used to model expected returns for
Financing Option Paper
Introduction This paper discusses various methods available to organizations when seeking financing for special projects, namely a Casino / Resort hotel complex with a projected budget of $600M. The various methods described include the analysis of capital valuations modeling with respect to the cost of various debt and equity measurements available. Long-term finance alternatives are presented, as are the different sources of capital available to organizations. The paper concludes with a look at various cash management techniques needed by the Casino / Resort for operating as well as the various methods of short-term financing.
Capital Valuation Models Capital modeling provides common metrics for risk and reward analysis that can be used to compare the risk-adjusted profitability and the relative cost of capital for a wide range of capital sources. Modeling capital allows one to evaluate the overall capital adequacy in relation to the risk tolerances and profile of your business segments. To properly analyze risk, management needs to consider how they will determine and fund an adequate level of economic capital for a business venture, such as a Casino / Resort hotel complex. There is a need to develop an economic valuation methodology and model that is consistent and comprehensive. The intent of this capital analysis is to assist with performance assessment and decision-making. You will need to develop scenarios focusing on various sources of capital you intend to pursue. It is necessary to calculate both the weighted average returns of your capital scenarios, and the expected rate of return your investors will demand for the individual debt and equity instruments you are considering as capital sources.
One model that should be considered is the Capital Asset Pricing Model (CAPM). It is a formula based set of calculations used to model expected returns for
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