Free «Principles of Finance- Equity Debt» Essay Sample

Apollo incorporated is a company that offers tertiary online and on-campus education in undergraduate, masters and post graduate studies (Apollo, 2013). Their services are different in that they allow room for innovation and creativity. Evidence of this is available from the fact that one of their flagship institutions is very successful in their fields of expertise. However, the company is experiencing issues with its stock prices. According to NASDAQ, Apollo Incorporated has experienced a decrease of about 67 percent over the last twelve months (Apollo, 2013). Phoenix University has also experienced a reduction in the number of admissions majorly due to its degrees lacking inherent values as per some students. Furthermore, the institution’s success has been attributed to marketing strategies than the preferred and more important academic credits. As such, investments need to be focused on the areas of marketing academic strategies and increasing its stock values.

Increasing stock values is a short term project that will be aimed at pushing Apollo Incorporated high in the rankings of NASDAQ (Pride, Hughes and Kapoor, 2009). Increasing the market value of Apollo Incorporated will also increase the value of Phoenix University. This may be one way of increasing the number of admissions. A long term project would be to change marketing strategies to more academic based ones. To strengthen their marketing strategies, Apollo Incorporated needs to be able to back their statements with recent results (Pride, Hughes and Kapoor, 2009). This will not only improve the perception of Phoenix University (one of their flagship universities), but it will also improve the number of admissions.



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Finding the right source of funding can be a difficult task (Pride, Hughes and Kapoor, 2010). The choices are vast but they all have their pros and cons. When dealing with any project, it is important to research on the types of financing before deciding on one. The most preferable source of funding is dependent on an array of factors of which purpose is the most important. It is noteworthy that there are only two main types of financing; debt or equity.

For a short term project such as increasing the stock values, cost of financing is an important factor to consider (Kotler and Arms, 2009). Stock prices increase when the business is good or due to an increase in demand of the business. A customer oriented approach is advised by Pride, Hughes and Kapoor (2010) as a way of increasing the popularity of Apollo Incorporated. Market segmentation and an in depth analysis of customer behavior is conducted to this end. Targeted communications with the postulated clients are conducted and bespoke plans are conducted.

It is important to realize that such a project cannot afford freeze periods. It is thus critical to choose a continuous and constant mode of financing. The source of finance should also be of low or no interest cost. With this in mind, retained earnings should be utilized for this project (Pride, Hughes and Kapoor). Phoenix University is one of the largest online institutions, which implies high profits. Evidence can be shown through an analysis of its statement of retained earnings and assets such as websites and online learning resources. The money accumulated over the years can be used for this critical project.

The pertinent question still remains on why this is the most preferable method. Well, most scholars agree that is the cheapest mode of finance for developed businesses (Pride, Hughes and Kapoor, 2009). In fact, this mode of financing has the lowest risk. Moreover, the returns for investing in stocks can be used to refill the same basket. This can be done on the company’s own resources and time.

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Long term investments can allow the leisure for freezing. They sometimes cost more and thus require input from both the company’s stakeholders and employees (Fabrozzi, 2009). While it is easier to include employees in this project, Phoenix University will need to involve its students. It is the students who will provide good results which will act as back up for academic marketing. The same institution is offering training in marketing and this will be a chance for the students to practice their skills. As such, it is advisable to use both long term bank loans and crowd sourcing as sources of funding (Jacob and Fabrozzi, 2009).

Bank loans are just but a type of loan, other types include mortgages and insurance premiums (Pride, Hughes and Kapoor). They are preferred because they have fewer interests owing to the high competition among this type of financing. In this case, such loans are able to provide the much needed high amounts and this can be paid over a long time (Battacharya, 2009). They also offer flexibility in terms of chances for an increase in the amount given.

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Crowd sourcing is a phenomenon as old as history. Even Aristotle espoused credibility and logic in the process of persuasion. This is where the university will outsource some of its marketing services to their consumers instead of a certain brand (Howe, 2010). This has been used successfully by most companies over the years. The fact that Phoenix University fully utilizes technology will take this exercise to a whole new level. This mode of financing is very low cost and less risky (Jacob &Fabrozzi, 2009). The returns are also satisfactory as consumers choose what they want and how they want it done. This method can be very effective in marketing strategies.


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