Project Finance and Private Public Partnership in financing logistics infrastructure. Arturo Capasso Università degli Studi del Sannio Introduction Finance scholars acknowledge a clear-cut distinction between corporate finance and project finance. The two techniques are considered as basically different approaches to the problem of raising debt to fund capital investments. In corporate finance lenders assess the creditworthy of a whole company‚ evaluating the going concern‚ the full range of
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the right hand side of a company`s balance sheet‚ which includes all the ways it`s assets are financed‚ such as trade accounts payable and short-term borrowings as well as long-term debt and ownership equity. Each business will have a different mixture depending on its needs and expenses. This specific mixture of debt and equity that a company uses to finance all it`s operations directly affects the risk and value of the business. Capital structure‚ as distinguished from this structure‚ doesn`t include
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equity capital‚ debt financing‚ equity financing‚ and grants? When will one need them and how will they use them? Let’s break them down. 1st‚ there ’s two kinds of financing: collateral financing (or equity capital) and debt financing. Equity financing is money raised through the business in the sale of shares from the organization. The individual acquiring the shares becomes part who owns the organization. And also this allows the company to acquire funds to work without incurring debt. Equity financing
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through equity issuance. This was done because MCI’s source of revenue was insecure in its infancy‚ and this allowed them to raise capital without being tied down by excessive debt repayments further down the road. To continue raising capital after MCI began posting early profits (particularly to repay short-term bank debt)‚ the company issued convertible preferred stock. This preferred stock was able to attract capital due to its dividend paying attributes‚ but prevented the dilution of common
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Traditionally‚ project financing has been most commonly used in the extractive (mining)‚ transportation‚ telecommunications industries as well as sports and entertainment venues. The Project financing is a method for obtaining commercial debt financing for the construction of facility. Project financing has become one of the core activities of banks in the recent years. With the growth in the economy and the revival
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Problem Statement: Winfield Refuse’s acquisition of MPIS was a great opportunity to increase revenue and reduce costs through economies of scale. However‚ the expansion of the firm also means that Winfield Inc. needs to select a method of external financing to continue its operations effectively. The Winfield family and senior management held 79% of common stock in 2012. This means the company places tremendous importance in the ownership of company. The acquisition of MIPS should not change the stakes
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qualitative analysis of the Loewen case study‚ starting from the excessive debt policy used in its expansion and ending with huge debt ratios and bankruptcy. The analysis includes the effect of the company’s policy and the financial distress it caused and results of such a financial condition. Method of Analysis: For the analysis we have used the historical financial data of the company‚ the history of the company and its financing policy‚ and the financial data of its competitors. Findings: The
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Investors. Retrieved July 6‚ 2013 from http://investors.thecloroxcompany.com/ Alaska Air Group‚ Inc. (2012). Investor relations. Retrieved July 6‚ 2013 from http://phx.corporate-ir.net/phoenix.zhtml?c=109361&p=irol-IRHome Peavler‚ R. (2013). Debt and Equity Financing. Retrieved July 6‚ 2013 from http://bizfinance.about.com/od/generalinformatio1/a/debtequityfin.htm
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an industry that maintains focus on new development and is challenged with ‘short product life cycles’ (Pg.2). Their future will be predicated on how they invest their cash flows and generate new business. This process will involve generating new financing and developing renovated product lines. Flash Memory‚ Inc. specializes in the production of Solid State Drives (SSD) which makes up 80% of their revenue. The remaining 20% is comprised of high end/ high performance technology products that are
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Adjusted Present Value Normal NPV calculation: NPV = −investment + CFN CF1 CF2 + +L+ 2 (1 + WACC) (1 + WACC) (1 + WACC) N where‚ in a simple situation: equity debt WACC = equity + debt (cos t of equity ) + equity + debt (cos t of debt )(1 − tax rate ) Using debt for financing has a tax advantage in that interest payments are tax deductible. This tax deductibility is a source of value for the firm. In the normal NPV calculation‚ this additional value is accounted
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