Question

Find current issues on TWO of the areas covered this week (Global Cost & Availability of Capital AND Raising Equity & Debt Globally) and post a brief description of the issues and state your position on each issue.  Post links of the sources.

Answer 1

In an era of growing globalisation and integration of economies, companies try to expand their operations world wide. For this purpose that are in need of capital. The cost and availability of capital is more concerned with the economy in which the company intends to expand operation

Due to varying labour and operational costs over countries, it is difficult to have standardized cost estimates. The procedural delays and political environment in the host country has great bearing on the cost structure. In some countries the economy is open for foreign investment whereas in some others it is not.

When raising equity and debt globally, the companies are very cautious. Equity offers a stake in ownership. Giving majority stake to a foreigner in ones organisation is often undesirable. The voting rights can have a bearing on the decisions of the company. Raising debt is subject to various inland laws. Every country has a well established system of regulations which has to be adhered to. Though capital can be raised easily from the international market, there are so many procudures only after fulfilling them can a company enter into it.