Risk/Return Relationship And Cost Of Capital

Risk/Return Relationship and Cost of Capital
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Exxon Mobile
Future External Financing Needs
Exxon Mobil is a public listed company with considerable investments in the oil industry. It is one of the largest publicly-traded companies in terms of market valuation. Its original owners can be traced back to Rockefeller's Standard Oil. Exxon Mobil has had tremendous extracting, refining, and distribution of petroleum products. Its major success brands include Exxon, Mobil, Esso, and ExxonMobil Chemical. In the past few years, the oil giant has been investing towards reducing greenhouses gases. In 2020, the company formulated a plan to reduce greenhouses gases by 20 percent (Rosenbaum, 2020). Thus, the company's investments are geared towards sustainable energy practices, hinting at future financing needs.
According to Exxon Mobil (2021), the company announced through the chairman, Darren W. Woods, that the company's long-term strategy is to provide sustained improvement amidst the low commodity prices and margins. Woods highlighted plans of the company to invest $30 billion to $35 billion every year up to 2025 to meet the world's demand for clean and sustainable energy. The huge financial implication may require external financing.
In addition, Exxon Mobil is investing in research and development by collaborating with organizations to develop low-emissions fuels and carbon capture technologies. ExxonMobil Low Carbon Solutions, the company's newly formed business, has been established to develop and sell low-emission technologies, with a primary focus on eliminating and storing carbon monoxide gases through carbon capture, the technologies of capturing carbon...