Capital structure describes how a corporation has organized its capital—how it obtains the financial resources with which it operates its business. Businesses adopt various capital structures to meet both internal needs for capital and external requirements for returns on shareholders investments. As shown on its balance sheet‚ a company’s capitalization is constructed from three basic blocks: Long-term debt. By standard accounting definition‚ long-term debt includes obligations that are not
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The major players in the foreign exchange arena are commercial banks ‚investment banks‚central banks‚trading instituitions ‚hedge funds‚corporations‚high net worth individuals and individual investor . Commercial and investment banks are the natural players in foreign exchange.Foreign exchange has the perfect characteristics for banks.It is profitable‚the spot market provides limited credit exposure ‚the forward market What is FOREX? The Foreign Exchange market‚ also referred to as the "FOREX"
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Stulz‚ R. (1996). Timing‚ Investment Opportunities‚ Managerial Discretion and The Security Issues Decision. Journal of Financial Economics‚ 42‚ 159-185. KPMG Kraus‚ A. & Litzenberger‚ R. H. (1972). A State-Preference Model of Optimal Financial Leverage. Journal of Finance‚ 28(4)‚ 911-22. London Stock Exchange Maris‚ B.‚ & Elayan‚ F. (1990). Capital Structure and the Cost of Capital for Untaxed Firms: The Case of REITs. AREURA Journal‚ 18(1)‚ 22-39. Miglo‚ A. (2010). The Pecking Order‚ Trade-Off
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Content Page Executive Summary -------------------------------------------------------------------------------- 3 1. Introduction of Background ------------------------------------------------------------------- 4 1.1 Introduction to Industry ------------------------------------------------------------------- 4 1.2 Prospect of Industry ------------------------------------------------------------------------ 5 1.3 Introduction to the Company -------------------------------------------------------------
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is an attempt to show simple ways in which this information can be used to understand how deleveraging scenarios could play out. To do so the authors develop and test a model to analyze financial sector stability under different configurations of leverage and risk exposure across banks. They then apply the model to the largest financial institutions in Europe‚ focusing on banks’ exposure to sovereign bonds and using the model to evaluate a number of policy proposals to reduce systemic risk. When analyzing
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internal cash for CPK to repurchase outstanding shares‚ they needed to decide which leverage borrowing debt was the best choice. After calculating 10%‚ 20% and 30% D/A ratio with market value‚ we found them only about 3%‚ 5% and 10%. In other word‚ although CPK is afraid of the high risk that brought from high leverage‚ it’s useless for them once the repurchase didn’t work. In my opinion‚ CPK should choose the highest leverage which within the same rating range. I was wondering‚ are there any other way
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the difference in the leverage and the debt ratios indifferent countries‚ including a country’s legal and tax system‚ corruption‚ and the preferences of the capital suppliers. To be specific‚ those corporations located in countries with more corruption and in those countries with weaker law system are more likely to use more debts‚ especially using more short term debts. In addition‚ explicit bankruptcy codes and deposit insurance are closely associated with higher leverage and more long term debts
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specific start and end dates of a backtest can have a material effect on the results; second‚ transaction costs can negate apparent outperformance; third‚ statistical significance of findings needs to be assessed. Key words: Risk parity‚ value weighted‚ leverage‚ turnover‚ trading costs‚ market frictions‚ statistical significance ∗ Department of Economics‚ 530 Evans Hall #3880‚ University of California‚ Berkeley‚ CA 94720-3880‚ USA‚ email: anderson@econ.berkeley.edu. † Department of Economics‚ 530 Evans
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due? How can you calculate the present and future values of an annuity due? Illustrate b.”The increase in the risk-premium of all stocks‚irrespective of their beta is the same when risk aversion increases” Comment with practical examples 3. a.How leverage is linked with capital structure? Take example of a MNC and analyse. b. The following figures relate to two companies (10) P LTD. Q LTD. (In Rs. Lakhs) Sales 500 1‚000 Variable costs 200 300 ---- ------- Contribution
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............................................................................... 3 Taxation............................................................................................................................................... 5 Operating leverage ............................................................................................................................. 6 Accessing Finance ...................................................................................................
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