Gap Analysis: Lester Electronics

The purpose of a business is to maximize profits for the investors. A business should make long-term investments today to determine the scratch of the business tomorrow. Any long-term investments made to acquire assets much(prenominal) as property, plant, and equipment, lead require knowing the constitute of obtaining notes to secure the assets. To even off for the cost of corking, a business scum bag use of goods and services debt, retained earnings, common stock, preferred stock, or a commixture of sources of funds. Additionally, a business can amplify the grocery honour of its business by earning more than the cost of hood. Lester Electronics, Inc. (LEI) is a $ euchre million dollar in annual gross gross sales U.S. Company and master distributor of consumer and industrial electronics going to U.S. and European suppliers. The company is merging with one of its key manufacturers, Shang-wa Electronics (SE), a Korean manufacturer of capacitors. As a requirement for th is merger, LEI should let on a capital of the United States structure to fulfill its obligations to increase stockholder and firm value. LEI must find an optimum capital structure of debt and equity sources that ordain minimize the cost of capital and maximize shareholder value. How LEI chooses to finance its harvest-festival will affect the capital structure.

This newsprint will append a gap analysis and identify the issues and opportunities, stakeholder perspectives, and end-state inclinations involved in assessing the financial needs of the merger needed for wealth maximization. Additionally, the paper will identify medium-term financial support alt! ernatives, and analyze the long-term financing instruments in the LEI/SE merger. Situation AnalysisIssue and Opportunity IdentificationThe basal goal of LEI is to create value for its shareholders. The CFO?s about important role is to create value from the companys capital bud appropriateing. Bernard Lester, chief operating officer of LEI has an single(a) egress agreement with John Lin, Shang-wa?s CEO. The exclusive supply agreement contract with Bernard... If you want to get a affluent essay, order it on our website: BestEssayCheap.com

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