Corporate Finance: Sources of Borrowings, Private Placement vs Right Issue, Effect of Share Issue on Wealth

Running head: CORPORATE FINANCE
Corporate Finance
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Name of the University:
Author’s Note:

1CORPORATE FINANCE
Executive Summary:
The aim of the report is to understand the aspects of corporate finance in mergers and
acquisitions. The report explains us the various ways of financial assistance and sources,
company deploys in the acquisition of a company. Sources of borrowing and other internal and
external ways of funding the company finance for these kind of operations. Advantages of
Private placement over right issue for a company undergoing finance through equity method.
Finally, we conclude the report on describing the effect of share capital under different sources
of capital borrowing.

2CORPORATE FINANCE
Table of Contents
Introduction......................................................................................................................................3
Discussions:.....................................................................................................................................3
a) Borrowings of company through Internal and External source of borrowings and the
combined use of them..................................................................................................................3
b) If the capital required is raised via share issue, should the company engage in a right
issue or private placement?..........................................................................................................4
c) How does the share issue affect the wealth of the existing shareholder in the case of rights
issue and private placement?.......................................................................................................4
Conclusion.......................................................................................................................................5
Reference.........................................................................................................................................6