Romeo Roberts has been running a manufacturing business for the last 15 years and has experienced steady growth over the years. He has just secured a major contract to supply products to an international chain store and needs to raise capital to expand his production capabilities. Romeo is hesitant to invest more of his personal funds in the business because he is thinking of retiring in 5 years and doesn’t want to place all his retirement funds in the business. Romeo is weighing his options between inviting his wealthy friends to become partners in his business or to raise capital from the public Required i) Advise Romeo on the partnership options available to him outlining the advantages and disadvantages of each option. ii) Advise Romeo on the options available to raise capital from the public, outlining the advantages and disadvantages. iii) What is the agency problem and how will it impact Romeo should he decide to convert his business to a company. iv) Romeo has heard about private equity firms and is contemplating whether he could seek funding from this source. Advise Romeo on the different types of private equity firms and whether they will be a suitable financing source for his business.
Romeo Roberts has been running a manufacturing business for the last 15 years and has experienced steady growth over the years. He has just secured a major contract to supply products to an international chain store and needs to raise capital to expand his production capabilities. Romeo is hesitant to invest more of his personal funds in the business because he is thinking of retiring in 5 years and doesn’t want to place all his retirement funds in the business. Romeo is weighing his options between inviting his wealthy friends to become partners in his business or to raise capital from the public
Required
i) Advise Romeo on the
ii) Advise Romeo on the options available to raise capital from the public, outlining the advantages and disadvantages.
iii) What is the agency problem and how will it impact Romeo should he decide to convert his business to a company.
iv) Romeo has heard about private equity firms and is contemplating whether he could seek funding from this source. Advise Romeo on the different types of private equity firms and whether they will be a suitable financing source for his business.
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