edf40wrjww2CF_PaperMaster:Desc
Risk Analysis on Investment Decision Tonya B. Hill University of Phoenix The shareholders wealth can be defined as the wealth of a firms shareholder through achieving the highest possible value of the firm in the marketplace. The main objective of the shareholders of a firm should influence all the decisions. For some reason, shareholders wealth maximization is not an easy or simple job. It all depends on the team work from the employee on hand. The reason is that financial management cannot directly control the business stock price. On the other hand, management can only act in a way that is consistent with the desires of the shareholders. In the Capital Budgeting Company paper, one will examine and analysis of risks as well as a variety of methods in achieving mitigation plan for each risk decision. One risk connected with cost of capital in W-Comm proposal will be surplus real estate at the Santa Clara plant that can be the second-hand cost of capital $18 million in the first three years. SAI can mitigate this risk through liquidity enhancements by bringing uninformed investors. Company should use stock split which makes an immediate lot more affordable small businesses and uneducated investors by facilitating stock purchases. SAI can be lower its cost of capital and acquiring liquidity by offering its stocks through internet. Direct stock purchase plans and Dividend reinvestment programs in online allow small investors the opportunity to buy securities cheaply, disclose more information and this narrows the gap so that it reduces SAI’s cost of capital. Silicon Art Inc. has had a hard time developing and increasing market shares to address the challenges and demands that their ...