Question

how does an investor evaluation of the investment alternatives differ from the evaluation by a company trying to raise funds

Answer 1

An evaluation of the investment by an investor differs from the evaluation of a company who is trying to raise funds would be differentiated in the following manner;

a) An investor would want to maximize the return of his wealth (either in the form of short-term or in the form of long-term), in case of companies an investment in projects has to be thoroughly looked into by valuing the internal generation of funds and at the same time companies has to look for the return it generates to its holders of the company.

b) An investor would always want to diversify his risk by making investments in stocks and or bonds which would neutralize his return while in case of companies it would want to leverage out the investments to get additional benefits without facing liquidity crunch from such investments.