Case Study 1

XYZ Airforce Sdn Bhd an owner managed company has developed a new type of heating using solar power and has financed the development stage from its own resources. Market research indicates the possibility of a large volume of demand and in addition to this, a significant amount of additional capital will be needed to finance the production.

Advise XYZ Airforce Sdn Bhd.

i. On the advantages and disadvantages of loan of equity capital.

ii. On the various type of capital likely to be available and the sources from which they might be obtained.

iii. On the potential method of finance.