Frecter Company

Business / April 23, 2015 / No Comments /
Analysis of the various financing options available to the Frecter Company as it anticipates purchasing new computer systems.

“John Axelrod, treasurer of the American Forge Corporation, is currently reviewing a series of financing options. The options include a five-year private placement of debt, a ten-year public debt issue, a ten-year public issue of convertible debt and a common stock issue. The proceeds will be used for a $10 million production facility expansion which will allow AFC to develop an aluminum engine for small aircraft.
The proposed engine investment is expected to yield an internal rate of return of almost 20 percent after taxes for at least ten years. This comes at a time when the company has greatly improved their profitability. Earnings doubled in 1982…”

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