Assignment Task
Forcefield Energy Inc., based in Ohio, is a publicly traded corporation specializing in heavy-duty and aeroderivative gas turbines. Despite its goal of maximizing shareholder wealth, the company faces challenges like cash flow uncertainties, market competition, and ethical issues, leading to a decline in stock price. In response, Joseph Sabatino, MBA, has been appointed to lead the corporate finance department and proposes expanding operations globally to mitigate risks and improve free cash flows. Forcefield Energy seeks answers to the following questions:
Define free cash flow and its importance to Forcefield Energy.
Discuss three characteristics of the company’s cash flows that could enhance firm value.
Enumerate three advantages and two disadvantages of the corporate form of business organization.
Define agency problems and corporate governance.
Evaluate whether maximizing shareholder wealth benefits society.
Identify four unethical actions that could harm a business`s goal of maximizing stock value.
Specify three attributes necessary for Forcefield Energy`s success as a corporation.
i) Explain the importance of corporate finance for Forcefield Energy. ii) List the financial skills Sabatino needs to help achieve Forcefield Energy`s goals.
List four major financial instruments for raising $10 million in long-term capital for expansion.
Explain four economic conditions influencing the cost of capital raised from financial markets.
