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c) SCL Bhd is a company specialising in the financial consultancy services. The company was incorporated in 2012 and currently has five consultancy firms nationwide
c) SCL Bhd is a company specialising in the financial consultancy services. The company was incorporated in 2012 and currently has five consultancy firms nationwide in Malaysia. Based on the analysis obtained, the financial services sector will grow by more than 10% over the next six years. The company is keen to take advantage of the high growth rate projected and opportunities for business expansion. Recently, the CEO has conducted few strategic meetings to consider seeking funds to finance the firm's expansion plan. Since the company is 'highly geared', its financial analysts and advisors have suggested that it should seek to raise funds through share issue, rather than loan. Required: Explain the term "highly geared" and its implications to SCL Bhd when raising additional funds. (10 marks)
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