Question

google technology do it sell shares to raise capital can you explain and what is google key considerations for developing a customized security capital structure

Answer 1

Google technology sells its shares to raise capital. This statement means that in order to generate funds for the growth of the company , a company can sell a part of its ownership in order to raise some funds for the develpoment of the company.

For EX: i have a company ABC Corp. with a 60% shares holding by ABC Corp. and rest 4% is in public. For a new project i need funds so I can sell 9% of the shares in order to get some funds for that project and still be the major share holder with 51% having same powers.

Considerations for developing a customized security capital structure:

1 Cost of Equity

2. Cost of debt

3. WACC ( weighted average cost of capital)

4. Tax consideration

5. Banckruptcy

6. Constraint on Managers