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You are the CFO of a private medium size company for which the main activity is the manufacturing, sale and distribution of low-cost computers. Your

You are the CFO of a private medium size company for which the main activity is the manufacturing, sale and distribution of low-cost computers. Your company manufactures the computers in India, exports them to the UK and sells them at national level. The company has been in business for the past 20 years and has financed growth initially with the founders savings (equity) and later in time, with bank loans. Today, your company capital structure is 50% debt (bank loans) and 50% equity. The 2021/2025 strategy approved by the board of directors targets capacity growth of 100% by the end of 2025 through acquisitions of smaller companies in the UK and the European Union. The company has had stable CAGR (compound annual growth rate) of 5% in the past 5 years and a pre-tax operating margin of 33.34%. At market level, a large number of economists in the UK have predicted that the country will be in a recession as soon as 2021 but there is also a chance that it recovers quickly if the vaccination process is successful and live goes back to normal quickly. As CFO, you believe in economists forecast and think that the UK economy will be in a recession for 2021 and part of 2022 only. As CFO, you have been tasked to i) forecast the Bank of England monetary policy tools from 2021 to 2025 based on the above information and ii) propose the right mix of internal and external financing products your company should issue to fuel its expansionary plans from 2021. Remember that issuing capital may be expensive, hence you should think carefully of what the best combination of short and long-term financial products for your purpose would be. The board of directors has expressed they want to raise $600 million in new capital in the following 5 years through the issuance of more than one financial product. They have given you freedom to choose the nature, maturity, size and timing of these issues. Identify and explain your findings in depth. You should consider all the internal and external factors that could impact the company revenue growth into the future. You should consider debt, equity or a mix of debt and equity. Include the reasoning for your choices and the advantages and disadvantages derived from your decisions, from the company perspective.

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