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she is currently focusing on philanthropy, and later shifts back into writing
music, her fame as a musician diminishes, which wouldn't guarantee her
rebranding a success as a musician in the entertainment industry.
POOFHFEST LadyA will be associating herself with charitable cause during
the 3 years, meaning the revenue she earns now would not be as much as
before. LadyAs 3-year commitment to charitable causes will be the
opportunity cost to her fame as a musician and will appear less in social
medias, and because the 3 years is considered long term, her engagement
on charitable causes will occupy her from making new music and selling
them, or being paid to appear in social media to maintain her strong image.
But most importantly, LadyAs option to rebrand herself will mean that she is
taking a new direction. And by doing so she needs to be certain that
implementing ethical objectives to rebrand herself is working towards her
goals to preserve her successes.
3.1.8 Recommend two sources of finance for LadyA if Kersey & Joyce suggest
the company moves into South American markets (strategic option 1)
One internal source Retained profits is the percentage of net earnings not
paid out as dividends, but retained by the company to be reinvested. In this
case, LadyA can use the retained profits generated from LadyA Management
Limited, where she owns 98% of the shares. For the past few years, LadyA
has created a strong image in the North American market, being at the peak
of her media power, wealth, and fame, and along with her endorsements on
cosmetics and perfumes through careful above-the-line and below-the-line
promotion, thus has created herself relatively huge profitability. With what is
considered an obscene amount of money, she could successfully manage
conducting the concert tour in South America. On the other hand, the
concert tour includes huge amounts of both fixed, and variable costs. LadyA
would need to hire employees on the lightings, sound checks, performance
dances, costume design, and so on. With so much to concern on, LadyA
might need to find an external source of finance in case her retained profits
are not enough to financially fund her concert tour.
One external source bank loans is medium-to-long term source of finance
obtained from banks, which are commercial lenders. The bank who lends
LadyA a certain amount of money does not have any ownership position to
LadyA and they do not get involved in LadyAs decision making, as well as
her activities on moving into South American markets, bringing her career
success in the US with her, and conduct a major concert tour in South
America, thus giving LadyA the freedom and flexibility to do what she wants