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Financial Strategies for Global Expansion: Analyzing IPO, Debt Financing, and Market Entry for Galaxy International

A financial strategy analysis for global business expansion through IPOs and debt financing.

Eli Simmons
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Running head:GALAXY INTERNATIONAL1Student Name:Institution affiliatedProfessor’s NameDateGalaxy InternationalAnalyze the potential benefits and drawbacks of Galaxy International proceeding with an InitialPublic Offering (IPO) as a means to raise funds for its expansion. Discuss other financingalternatives, such as issuing bonds, and evaluate the advantages of debt over equity.Additionally, recommend a strategy for Galaxy to enter the Chinese market, taking intoconsideration the leasing vs. buying decision for the plant, and suggest an approach to hedgeagainst currency translation and transaction exposure. In your response, calculate the WeightedAverage Cost of Capital (WACC), assess whether Galaxy’s expected returns would exceed itsWACC, and determine whether the company should participate in the IPO based on the expectedreturn on stock. (Word count: 1800-2200 words)

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GALAXY INTERNATIONAL2Background InformationGalaxy International ismanufacturer ofhigh-tech carbon composite skislocatedin theNortheast U.S. The company has been producingformore than20 years witha population of125 employeesand annualaveragesalesof approximately$50 million.The company is ownedbyJeremy Rivenwho wishes toexpand his current U.S. facility fromthe available40,000 squarefeet toabout100,000 square feetand outsourcelabor fromChina. Currentlythe companyhasfocused on aninitial public offering (IPO) that will be used toenhance the firm funds to goglobal(Hall, 2004).This papermainly focuses on theIPO pros and cons andgoes further to explainotherappropriatefinancing alternatives as well as strategiesfor the companywell being.Additionally,the paperdescribes the advantages of debt over equity and weighted average cost of capital(WACC)in order todetermine of the firms capabilityto raise capital. It also describes the beststrategythat the firm can employforitto enter intheChina’s market and whether they willleaseor buy the plant in the country andlastlyexplains portfolio management aspectthat isrelated toGalaxy.Aims and ObjectivesEvery research study haswell definedaims and objectives.Regarding to this, theresearch paper willalsobecharacterized with different typesof objectives that willbe achievedduring the research.The main objectivesrelated tothis research paper are listed below:To recommend from the analysis whether the company should or shouldn’t proceed withan initial public offer
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