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You are running Joe Corp (JC). Currently it's sales are growing exponentially (currently 10 mill / yr). You need an influx of cash now to expand overseas (estimate of 3 million). You know your company is successful and you will not have a problem selling your shares or paying any amount owed back within a short time 1. What is the best method of raising capital and why (.5) 2. If you decide to sell shares, what is the best method and why (.75) 3.If you decide to sell shares, what is the worst method and why (.75)

User MatthPen
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Final answer:

For a successful company requiring capital for expansion, the ideal options are borrowing or issuing stock, depending on factors like control and costs. The best method for share issuance could be a public offering or private placement, while over-the-counter sales might be the least advantageous due to lower exposure and potentially reduced valuation.

Step-by-step explanation:

If you are running a successful company like Joe Corp with exponential sales growth and require an influx of cash for overseas expansion, the best method of raising capital can be either through borrowing or by issuing stock. Choosing between these two will depend on several factors including the desire to maintain control, the cost of financing, and the company's financial health.

When considering issuing stock, a possible best method would be through a public offering or private placement to accredited investors; both are efficient ways to raise capital from investors who are interested in the growth potential of the company. Private placements can be particularly beneficial as they often involve fewer regulatory requirements and can be tailored to attract specific investors. On the other hand, the worst method may be issuing shares through an over-the-counter (OTC) sale, which may not reach as many potential investors and could result in a lower valuation due to less stringent listing standards and visibility.

User Luigi Caradonna
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