Business Case

The leaders of the Fortune 500 company studied in our class want to acquire more funding and will need a business case. This business case will be featured in the financial plan you will create next week. To get yourself prepared for developing the financial plan, create an outline of your business case in which you do the following: Determine why funding is needed for the Fortune 500 company selected in week one. Determine the sources of funding. Consider self-funding, borrowing, equity, initial public offering, venture capital, common stocks, and bonds. Evaluate the requirements of each funding source you determine appropriate. Analyze the associated risks of each funding source. Decide which sources are the best fit for your company based on the requirements of each. Justify your decision. Estimate the cost of capital for both short-term and long-term funding sources. Research current estimated APRs for your selected sources of funding. Consider creating a table or chart to display this information.

Sample Solution

Outline for a Business Case for Funding a Fortune 500 Company

Executive Summary

This business case presents the rationale for seeking additional funding for [Fortune 500 Company Name], a leading company in the [Industry] industry. The company has experienced significant growth in recent years and is seeking funding to support its continued expansion and innovation.

Full Answer Section

Company Overview

[Fortune 500 Company Name] is a leading provider of [Products or Services] to [Target Market]. The company has a strong track record of innovation and customer satisfaction, and it is well-positioned for continued growth.

Need for Funding

[Fortune 500 Company Name] is seeking funding to support the following initiatives:

Expand into new markets: The company has identified several promising new markets that it is eager to enter. Funding would allow the company to invest in the necessary resources to successfully launch and grow its business in these new markets.
Develop new products and services: The company is committed to staying ahead of the competition by developing innovative new products and services. Funding would allow the company to invest in research and development to bring these new products and services to market.
Increase marketing and sales efforts: The company is committed to expanding its customer base and increasing its market share. Funding would allow the company to invest in marketing and sales initiatives to reach new customers and drive sales growth.

Sources of Funding

[Fortune 500 Company Name] has considered a variety of potential sources of funding, including:

Self-funding: The company could generate additional funds by increasing its profits or issuing new shares of stock to its existing shareholders.
Borrowing: The company could borrow money from a bank or other financial institution.
Equity: The company could sell shares of stock to new investors.
Initial public offering (IPO): The company could go public and sell shares of stock to the public for the first time.
Venture capital: The company could seek funding from venture capitalists, who are investors who provide funding to early-stage companies with high growth potential.

Evaluation of Funding Sources

The following table summarizes the requirements and risks associated with each potential funding source:

Funding Source	Requirements	Risks
Self-funding	Strong financial performance, existing shareholders willing to invest	Limited access to capital, dilution of ownership
Borrowing	Strong credit rating, ability to repay debt	Interest rate risk, financial distress
Equity	Strong track record, attractive business proposition	Dilution of ownership, loss of control
IPO	Strong financial performance, experienced management team	Underwriting costs, volatility of the stock market
Venture capital	Early-stage, high-growth potential	High risk of failure, loss of control

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