Molycorp was the only manufacturer of rare earth minerals in the western hemisphere. The company was in the midst of a project with capital expenditure of $1billion for vertical integration in rare earth minerals, oxides, and metals. However, for 2012’s second quarter, it did not succeed to mark the desired revenue and earnings that consequently declined its stock value by 29% (in the last one and a half year its stock value had declined to $11 from $77). The declining prices of rare earth minerals were the key factor in this weakening financial returns. Now the company faced with limited cash capacity for funding its project that required management to contemplate: the amount of capital to raise, what kind to raise, and when to raise. However, these solutions would focus its capital structure, along with its skills to incorporate its business approach.
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