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Showing posts with label debt financing. Show all posts
Showing posts with label debt financing. Show all posts
Saturday, 14 December 2024

DEBTS are often neglected in company analysis and valuations. Red flags.

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Look out for companies that report consistent profits but also a substantial rise in gearing, which would indicate negative FCF.   Receivabl...
Tuesday, 30 May 2017

Capital Structure, Dividends and Share Repurchases

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There is usually more to lose than to gain when making a decision in this area. Managers should manage capital structure with the goal ...
Saturday, 29 April 2017

Investors' Minimum Required Rates of Return, Cost of Debt and Cost of Equity

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A company may raise capital by issuing debt or  equity,  Both of which have associated costs. Investors' Minimum Required Ra...
Friday, 26 October 2012

Leverage and Risk

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The most obvious risk of leverage is that it multiplies losses.  A corporation that borrows too much money might face   bankruptcy   ...

Leverage

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Using OPM (other people's money) to make money is smart business as long as the company doesn't go over its head in debt. From the...
Sunday, 24 June 2012

Financing a capital project with equity may be a signal to investors that a company's prospects are not good.

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Corporate Finance - Signaling Prospects Through Financing Decisions One of the key assumptions Modigliani and Miller make in their work...

Differing amounts of debt financing cause changes in EPS and thus a company's stock price.

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Effect of Changes in Sales or Earnings on EBIT   Differing amounts of debt financing cause changes in EPS and thus a company's stoc...

Corporate Finance - Factors that Influence a Company's Capital-Structure Decision

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The primary factors that influence a company's capital-structure decision are: 1.Business risk 2.Company's tax exposure 3...
Wednesday, 25 April 2012

Investor concerns about the use of leverage in the Bakrie Group

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Deadline looms for Bakries covenant breach Mon Apr 23, 2012 7:11pm EDT By Prakash Chakravarti and Janeman Latul (Reuters) -...
Saturday, 7 January 2012

Speculative-Growth Stocks - What Has Growth Done to the Balance Sheet?

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Like most speculative-growth companies, Yahoo in 1999 doesn't generate enough cash internally to pay for an aggressive expansion. It ...
Thursday, 22 April 2010

Risk of Loss Caused by a Company's Indebtedness

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Companies that choose to finance a large proportion of their assets with borrowed money face an increased risk of being unable to meet thei...
Monday, 18 January 2010

Sources of Finance for financing growth

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WHAT CHOICES DO YOU HAVE TO RAISE FUNDS? 1.  DEBT FINANCING involves a loan that will accumulate future interest. 2.  EQUITY FINANCING in...
Saturday, 5 December 2009

What do people mean when they say debt is a relatively cheaper form of finance than equity?

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What do people mean when they say debt is a relatively cheaper form of finance than equity?   --------------------------------------------...