ADVANTAGES AND DISADVANTAGES FOR AMSC

Advantages and Disadvantages for AMSC

Advantages and Disadvantages for AMSC

Introduction

American Superconductor is the global foremost developer and producer of high temperature superconductors (HTS) son. Capable of handling more than 150 times the electrical current of copper wire of the same size, HTS wire offers two main advantages:

1. Radically summarized size and weight of electrical equipment

2. the power flow and significantly higher efficiency

Therefore, the components (such as coils to industrial motors and generators, or naval) employing HTS wire providing a power density much higher while offering potentially lower manufacturing costs and maintenance.

The main advantage of debt financing is that it allows the founders to retain ownership and control of the company.( Harvey 2002) Unlike capital, entrepreneurs are able to make major strategic decisions and also to retain and reinvest more company profits. Another advantage of debt financing is that it offers small business owners with greater financial freedom than equity financing. Debt securities are limited to the repayment period, after the lender has no claim on the company, while investors' claims "does not end until their stock is sold.( Aswath 2007) In addition, a debt that is paid on time can improve the credit rating of a small business and make it easier to obtain various types of funding in the future. Debt financing is also easy to administer because it generally lacks the complex reporting requirements that accompany some forms of equity financing. Finally, debt financing tends to be less expensive for small businesses over the long term, although more expensive in the short term, equity financing . The advantage of equity financing: no interest charges, no payment of the debt due to low risk of liquidation of cash flows.

Disadvantage of equity: the dilution of ownership, increase the overall cost of capital because interest payments on debt ...