Posted: May 14th, 2025

Is expanding debt a good idea?

Assume you are the CFO of a medium-sized company and you are advising the CEO on some upcoming strategic initiatives that will have long-term implications. In other words, these are important decisions.

For your initial discussion forum post, address the following questions posed by the CEO:

• It appears we may need to raise more capital. Is expanding debt a good idea? Why or why not and should our given assets impact this decision?
• In our economic environment, should we issue bonds, common stock, or preferred stock? What would be some pros and cons?
• Or should we forego this immediate opportunity and buy back some of our outstanding common stock? What market conditions would make this a good move; what might be some pros and cons?
• Should we issue a dividend, or should we retain cash in the company for future opportunities? How might this impact future growth? Are we obligated to pay our shareholders a dividend?

Your initial response should 250 words. Graduate school students need to learn how to assess the perspectives of several scholars. Support your response with at least one scholarly and/or credible resource in addition to the text.

Discussion Two:

Prior to beginning work on this discussion forum, read Chapters 16, 17, and 18 in the Foundations of Financial Management textbook.

Initial Response:

Assume you are the CFO of a medium-sized company and you are advising the CEO on some upcoming strategic initiatives that will have long-term implications. In other words, these are important decisions.

For your initial discussion forum post, address the following questions posed by the CEO:

• It appears we may need to raise more capital. Is expanding debt a good idea? Why or why not and should our given assets impact this decision?
• In our economic environment, should we issue bonds, common stock, or preferred stock? What would be some pros and cons?
• Or should we forego this immediate opportunity and buy back some of our outstanding common stock? What market conditions would make this a good move; what might be some pros and cons?
• Should we issue a dividend, or should we retain cash in the company for future opportunities? How might this impact future growth? Are we obligated to pay our shareholders a dividend?

Your initial response should be a minimum of 300 words. Graduate school students need to learn how to assess the perspectives of several scholars. Support your response with at least one scholarly and/or credible resource in addition to the text.