Describe the main financing sources for corporations in both countries (United Kingdome and Qatar). Explain the reasons whether and why corporations in both countries are looking beyond national borders to access international capital markets. (Dimentionl): The five main sources of financato companies to both companies of Qatar and United Kingdom are: 1. Commercial Banks: Commercial banks are the most important source of working capital. They provide a very wide variety of loans tailored to meet the specific requirements of an industrial unit. There are 6 main sources coming under the commercial banks, which are: 1) Bank Loans: When a bank makes an advance in lump sum against some security it is called loan. The bank loan is usually provided for one year. But now a days term loans are also provided for 3 to 7 years. The term loans might be either medium term or long term loans. 2) Cash Credits: A cash credit is an arrangement by which bankallows their clients to borrow money up to a certain limit against some tangible guarantees or securities. Separate cash credit is opened for each customer and they are allowed to withdraw cash according to their needs within the agreed cash credit limit. Moreover, client can also deposit his cash surpluses in his cash credit account in order to reduce his interest liabilities. 3) Over Drafts: Over drafts means an agreement with bank by which a current account holderis allowed to withdraw more than the balance in his credit up to a certain limit. The interests are charged on the overdrawn account. 4) Bill Discounting: Companies can use the financial assistance by discounting their bills of exchange and also the promissory notes from banks. Moreover, the documents are discounted by the banks at a price lower than their face value. 5) Packing Credit: This type of assistance might provide by bank to take care of a specificrequirements of the company when it receives some export order. Packing credit is a facility provided by bankto enable the enterprise to buy/manufacture the goods to be exported. 6) Security for Assistance: Normally the bank provides the assistance against some of the security. 2. Indigenous Bankers: Private money lenders and other country bankers that used to be the only one source of finance before the commercial banks that were established. They used to charge veryhigh rates of interest and exploited customers to largest possible extent. 3. Trade Credit: Trade credits are often described as the self-generation source of short term finance. Companies enjoying good reputation in the market and they are foundprocuring their requirements of raw materials tools etc. on credit as a matter of the routine. The main advantage of this source is that it is very convenient method offinance; it is very flexible and it might be possible to obtain favourable terms. Willingness of the supplier to allow delay in payment and buyerneed forit largely determines the extent to which trade credit system of finance is to be used for the meeting short term requirements of the firm. 4. Instalment Credit: This is another methodunder which the assets are purchased and possession goods are taken immediately, but the payment is made in the instalments over a predetermined period of time. Generally interest is charged on the unpaid price orit might be adjusted in the price. 5. Advances: Some of the business houses get advances from their customers and agents against orders and this source is a short term source of the finance for them. It is a very cheap source of finance and in order to minimize their investments in working capital, some firms having long production cycle prefer to take advances from their customers. International capital markets are the same mechanism but in the global field, in which governments, companies, and people borrow and invest across national boundaries. In addition to the benefits and purposes of a domestic capital market, the international capital markets provide the following benefits to Qatar and United Kingdom: 1) Higher returns and cheaper borrowing costs: These allow the companies and governments to benefit from the foreign markets and access new sources of funds. Many domestic markets are too small or too costly forcompanies to borrow in. so, by using the international capital markets, companies, govemments, and even the individuals can borrow or invest in other countries for either higher rates of return or for lower borrowing 2) Diversifying risk: The international capital markets allow individuals, companies, and governments to access more opportunities in different countries to borrow from or invest, which in turn reduces the risk. The theory is that not all markets will experience contractions at the same time. costs. * With greater financial integration in the last two decades, what are the main factors that affect their choices of capital? Are legal considerations, economic potentials and challenges, demographic and cultural transformations act as factors that determine their decisions-making process on capital structure? Explain your answer. (Dimention2): The Choice of capital has changed to a large extent due to the financial integration in last 2 decades.. because of the financial integration in last two decades is focusing at access to the global economy to reduce the overall cost of capital and different entities that have always tried to reduce their cost of capital by getting exposed to different currencyexposures, but it is also offering them with a chance of reducing the cost of capital as interest rates. In different countries there are lower and various countries which are offering with different cost of capital, so multinational organisations can always try to exploit these profits by taking an additional risk in order to reduce their overall cost Yes, there are legal consideration along with Economic consideration and demographic as well as cultural considerations that have to accounted in before making a capital structure decision, because the legal framework and the economic framework as well as the cultural variety of another country should always be accounted into calculation of the overall capital structure. As it will be helpful in better management of the riskiness associated with the different types of capital structure and subsequently it can be said that it will be benefiting the company in order to proactively determine various risk associated with the capital structure. Hence, it can be said that these factors have to be analysed proactively and an optimal capital structure is selected which will be very helpful in maximization of the overall rate of return of the company and maximization of the value of that company. From the previous question, what impact do the previous factors have on the choice of capital structure for corporations in both countries and how will they affect corporate financing decisions in the future. (Dimention3): There is an obvious advantage of globalization of a capital markets on capital structure and choice of capital for all the countries. This is because of the globalization, goodcompanies in poor credit rating countries they can access funds at a lower cost, and the lenders who are looking for such a companies in a very high credit rating countries can also get comparatively better returns than what they get in their own countries. Also, it helps in diversification as exposure to different types of economies like for example the emerging markets, developed economies, etc. it is very easier to achieve one possible disadvantage is that distress in one country can scanty to other countries and hence it can increase the risk if proper risk management practices are not taken into the account. Based on your previous analysis on the factors that affect capital structure and financing choices, do you find the globalization of capital markets integration of international capital markets) has played a complete positive impact on the capital structure and choices of capital in both countries? Explain your answer. (Dimention4): Because of globalization, funds are available at a lower costs to borrowers in emerging market economies and hence this will prompt them to influence their balance sheets even more than what they used to do before globalization. Moreover, Because of a higher level of diversification, the risk is lower compared to earlier and subsequently the equity component in both countries can also be increased. Hence, globalization offers more flexibility in capital structure for the companies. Question 1: Write an introduction and conclusion for this project