Final answer:
ABV company needs to evaluate various financing options for international expansion including issuing stock, borrowing, and early-stage investors. Each method has its pros and cons that the company must weigh carefully. Proper safeguards and smart investments are crucial to avoid failure and ensure successful entry into international markets.
Step-by-step explanation:
ABV company, a leading manufacturer of women's apparel in India, is considering expansion into international markets and exploring options to raise the necessary funds. As an investment bank professional, it's critical to provide them with a comprehensive understanding of the methods of international trade and the types of international financial markets available for raising capital.
Reinvesting profits can be a prudent choice for funding, but it might not provide the large capital influx required for significant expansions. Furthermore, banks are generally more inclined to lend to well-established firms due to a lower perceived risk, as these firms have a track record of profitability and collateral to offer.
Understanding the types and characteristics of different financial assets traded in various markets is essential as each has its inherent risks and rewards. The company must carefully consider its goals, the associated risks, and the expected returns when choosing financial instruments within these markets.
However, it's important to note that failing to put proper safeguards in place can result in the company's failure, especially if the raised funds are not invested smartly to increase productivity and generate sufficient returns. The choices ABV company makes now will define its financial structure and impact its future capability to invest and expand.