Raising finace for multinaional enterprises

Debt and equity are the two main sources of capital available to businesses. The form of debt financing is usually granted with expected repayment, and plus interest. Some companies and corporations use debt raising their finance through national market, foreign debt market and Euro-securities market. Advantage of debt financing is presented by low cost, low risk and beneficial reducing taxable profit. However, there are still exist some disadvantages of debt finance. Borrowing has to repay the capital and also include interest. Furthermore, if a company carried too much debt, it will make company unattractive to investors and reduce their ability to raise additional capital in the future.

The form of equity financing is that money obtained from investors in exchange for owned share in the business. Contrast with debt financing, equity financing is no obligation to pay dividends, and not be paid the capital. Some companies and corporations will obtained and increasing their capital from the main market of the London Stock Market, Alternative Investment Market and venture capital.

Debt and equity are both useful increasing the capital of companies. If company obtained too many funds from investors, there are issues existed that company could loose their management capability. Their exclusive have to make a balance strategy for borrowing and obtaining from investors.

In order to increasing their capital, most of multinational company trends to global expansion.  Joint ventue is the one of style for company and corporations expanding their business, such as Sony Ericsson Mobile Communications International AB. It was built a joint 50% shares respectively by the Japanese consumer electronics company Sony Corporation and Swedish telecommunications company Ericsson.
Sony and Ericsson aimed increasing their GSM market share and promoting their profitable situation respectively, so they chose joint together. However, the result of their alliance is not like their expected. According Sony Ericsson annual report 2010, it demonstrated their operation turnover declined significantly, and EPS continued decrease on four years.

Creasing capital for multinational companies is the most things which have to be concerned that risks which include environment risk, exchange rate risk, political risk and so on. So multinational firms have to focus on their long term strategy to create wealth growing.