Discuss and analyse all the issues (1-4) in order, and any other implications arising from this scenario for presentation to Mark Golledge . You should give numerical examples where appropriate...

1)
News Review Ltd is a publishing house which is planning to expand in the field of e-
paper and a newspaper, to expand in this field News Review Ltd. Requires huge funds. Setting
up a whole new filed of business is very tedious task which involves lots of planning and funds
to execute those plans. Now a day most of the advertising is done over the internet as more
people has started using internet on day to day basis.
Companies planning to expand always need funds to acquire new assets for the growth of
the organization; there are various sources of funds which companies can use in order to fund the
assets. There are two major source of finance which can be used namely equity offerings and
debt offerings.
Equity offerings include common stock in case of corporation. Common stock is issued
y initial public offer i.e. IPO. IPO is one the most basic source of finance which is used by the
organization when they are planning to work on large scale and require huge funds to operate. In
this company issues large no of common stock again a price known as issue price it can be more
than or even less than the par value.
Another very commonly used source of finance debt Offerings, debt offerings includes
Debentures, bonds, notes Payable etc. these are external sources of finance which also ca
ies a
fixed rate of interest which must be paid periodically.
Raymond has given a proposal that sole objective of listing is to maximize profits before
taxation. It’s a fact that profit is a driving force for any organization and also most basic reason
why an organization exists but to say that the sole purpose of existence of an entity is just profit
now days is not co
ect. Apart from earning profits there are other requirements which must also
e fulfilled such as social responsibility, employee’s welfare, maintaining health relationship
with customers, building
and loyalty etc.
Raymond projected to the management that making profit is the sole object to go for
public issue of shares. To an extent the proposal is acceptable because being part of the
management of an organization one must realize that the basic and most important reason why
we enter into new ventures is to increase the profitability figures. Raymond has showed that he
understands it very well that the reason for entering into initial public offer is to make more
profits and this quality is one of the prerequisite to become a leader which Raymond possess.
But apart from making profit organization has to fulfill their duty towards society and its
employees and it must also be taken care off, Raymond didn’t mention any other reason at all.
Mark Golledge must consider this fact that other prospects are equally important now days and
in order to succeed and become famous an organization must take care of all these aspects. Thus
Mark must try to ask Raymond about these aspects to make sure he understands the importance
of these aspects also.
2)
Second proposal by Raymond is that expansion requires more offices and more printing
machines for such offices. Raymond tried to make a point here that company needs to invest
money in additional fixed assets, here Raymond made a little mistake by saying additional
printing machines. As we know that the basic purpose of expansion is to increase the sales by
increasing the production but in the present case company is entering into a venture where they
will be offering E-newspaper and other stuff on internet, publishing material on internet do not
equire use of printing machines.
Although Raymond co
ectly mentioned that new offices would be required but the fact
that he said that new...