Deadline 10/ 9/12 time 3: 00 pm 2-3 body pages Document Preview: Unit 2 Joyce Assignment Unit 2 - Money Reading Assignment: Introduction to Business, Chapter 11. You may also want to review...

APA Format 6th Edition Template
Running head: FUNDING BUISNESS VENTURE 1
Funding the Business Venture
Name
University Name
Author Note
Funding Business Venture
Introduction
The analysis of financing and investment decisions at a company level has a long tradition in the field of finance. The issue of business financing has been addressed extensively in the literature by different authors. In their classic book titled "Security Analysis", Graham and Dodd (1934) discuss the principle of "optimal capital structure". They contend that the "optimal capital structure of any company incorporates senior debt to the extent that it can be issued and purchased safely by investors" (p. 509). This implies the existence of a minimum capital cost which matches the maximum company value.
Modigliani and Miller (1958) on the contrary, argue that there is no optimal debt amount because capital cost and company value are not correlated when there are no market imperfections. Later on, Modigliani and Miller (1963) complemented their initial analysis and concluded that company value can be increased with higher debt levels when interest payments are tax deductible, thereby establishing a relation between capital structure (and its cost) and company value.
Goal of the organization from the perspective of financial management
The organizations are having a strong focus on efficient utilization of resources so as to have maximum returns. The major goal of the financial management as well as an organization is to maximize the shareholder’s value and shareholder’s equity. The wealth maximization of the organization is highly dependent on the shareholder’s value and shareholder’s equity. With a focus on the shareholder’s wealth, the organizations have also adopted different unethical ways to increase the profits and shareholder’s wealth. Apart from increasing the wealth and shareholder’s value the organizations also focuses on attaining different objectives and goals which are sustainability, maximization of profit, minimization of cost, attaining high market share, sustaining the competition. (Ross, 2010)
Investment Banker
Investment banker helps the organization in taking financing issues in the organization, they are the people who focuses on managing the issuance of bonds handling different aspects of shares and stocks to be issued by the company. For funding the business it is important to take the advice of Investment banker as he can advice about different aspects of funds.
Stock Market:
Stock market is the market where the trading of the shares and the stocks are done, in this market the company raises funds through equity. This is the market where the shares and stocks and trade and the prices of the shares are highly fluctuated.
Risk financing:
Risk financing considers the risk...