Financing Company Growth at Mrv Engenharia E Participacoes S.a

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Financing Company growth at mrv engenharia e participacoes s.a Questions to Address in the Case Study Analysis 1. What creates the need for considerable external financing? Could the company avoid using external financing? 2. What is a preferable source of corporate financing – debt or equity? How does each of these alternatives affect the company financial flexibility, risk, and ownership structure? 3. How does raising equity capital abroad, e.g. through American Depository Receipts, compare to raising equity capital domestically? What are the advantages and the disadvantages? 4. How do you suggest that MRV finances its growth plans? Why does your choice satisfy best the needs of the company? 5. Based on the information in the case and your knowledge about the corporate debt market in Brazil what features would make a debentures issue attractive for domestic investors? 6. If you were a shareholder in the company, which financing alternative would you favor the most? Which one would you favor the most if you were a creditor? 7. What is the background of the company and what is the management’s goal? 8. What creates the need for considerable external financing? Could the company avoid using external financing? 9. What are the major differences between the proposed financing alternatives? 10. What criteria should the company consider in its evaluation of the three financing alternatives? In the case study titled “Financing company growth at MRV Engenharia e Participacoes S.A.” we find the company, MRV Engenharia e Participacoes S.A. (MRV) facing the problem of finding suitable external financing to fuel future growth. MRV was founded in 1979 in Belo Horizonte, Minas Gerais, Brazil by Rubens Menin Teixeira de Souza and a few partners. They started out developing low income residential real estate. As time passed, the

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