Inform Business

Greg Gumbel says he was tricked into informercials

Forbes |

In Brief...

If your business can't earn its cost of capital, you won't be in business very long. By contrast, small companies looking to raise capital by selling slices of equity can end up paying in the neighborhood of 25% to 100% on their money.. Take General Electric ( GE - news - people ), which recently traded at $11.40, or 6.6 times its trailing 12-month earnings. Uncle Tom and Aunt Polly are tapped out, and lenders are scared stiff, so you offer 25% of your venture to investors in the form of common stock without dividends. Use your own cash, if you can--and make sure each dollar earns a decent return.

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