Risk management plan

business has imminent shortfalls and drawbacks, then, consequently, I would make the right decision based on the financial analysis I make based on that. For instance, if the according to the payback rule the business is forecast to be worthy, it would be advisable to invest in it. If it would take too long to get the invested finances in a business, then as an investor, I would consider the profitability of the business before investing in it.
Debt financing is the concept where a business seeks specified external sources of funds to support the ventures of the business. In terms of investment options, debt financing presents its challenges and advantages. The advantages include the fact that it accords the business extra financial sources to boost its capital base and increase its financial ability. Consequently, it makes the business better in terms of financial ability. However, debt financing has its disadvantages. For instance, in most cases, the debt accrues some form of interest which would be an extra financial burden on the company. In addition, if the borrowing organization makes no financial gains from the cash borrowed, the business would accrue losses from the ensuing recovery of borrowed money.
An organization might resolve to issue stocks other than bonds to get funds because of several reasons. First, unlike bonds which guarantee financial returns to the investor based on the coupon, stocks compel the organization to only give to the investor returns accrued as per the performance of the organization. In addition, stocks are not bound to any time frame unlike bonds which bind the organization to act within a given time frame in which it would issue returns to the investor. In reference to bonds, the investor is guaranteed to get interests from the returns based on the investment made.
Financial returns bear their relevance to the probable risks. Ion most cases, riskier financial investments have probable high returns financially. However, the

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