Capital Structuring (Glenlake Risk Management) by Alastair Graham

By Alastair Graham

Themes comprise: investment concepts on hand to managers * fairness investment * debt investment * hybrid monetary tools * types at the optimum capital constitution * debt profile administration * refinancing.

Show description

Read or Download Capital Structuring (Glenlake Risk Management) PDF

Similar corporate finance books

Growth Gamble: When Leaders Should Bet Big on New Business - and How They Can Avoid Expensive Failures

Few could disagree that there is been a normal acceleration within the international industry to which no association is totally immune. company publication cabinets are presently filled with titles approximately "Speed Shifts," "Lightning Change," "Move Fast," "Adapt or Die" - yet such catchphrases do not inevitably equate to good company approach.

Privatization and Equity

Privatization and fairness, the participants examine many of the difficulties caused via the swap to non-public possession. They determine components which can result in larger inequality, together with adjustments in industry constitution, overseas possession and working guidelines. in addition they spotlight the implications of ignoring issues of fairness.

Managing Diversified Portfolios: What Multi-Business Firms Can Learn from Private Equity

Developments lately ruled the company panorama: the good fortune of non-public fairness as a huge strength available in the market for company keep an eye on and the strain on diverse businesses to refocus. deepest fairness enterprises have skilled unmatched progress with investments in commonly varied company portfolios, whereas multi-business organisations have come stressed from capital markets to divest unrelated actions.

Executive Corporate Finance: The Business of Enhancing Shareholder Value

If you would like to grasp the reply to the query, "what are the most recent company finance innovations and versions at present getting used by way of best enterprises, to enhance their enterprise making plans and execution, in attaining improved returns, and deal with company dangers optimally? ", then this publication is for you. New advancements in utilized company monetary strategies are aiding many businesses higher comprehend and deal with company dangers, enhance execution effectiveness and total monetary functionality.

Additional info for Capital Structuring (Glenlake Risk Management)

Example text

5 times. An interest cover covenant makes it an event of default for the borrower’s profit before tax and interest (PBIT) to fall below the stipulated multiple of interest payments. Example 2 The risks of taking on excessive debt even for a profitable company were clear in the case of Autos Inc, a small listed used-car dealer. In the first half of 1997, the company announced interim profits that had increased over the previous years. At the time book leverage (sheet debt/stockholders’ funds) stood at 175% but interest cover was three times, that was seen to be in line with projections.

However, lower demand for used vehicles and a subsequent decline in both sales and margins in the second half led to a profit warning in July 1998 that indicated a loss, thus wiping out interest cover. As a result, the company’s stock price fell 37% in the week following the warning, further increasing the company’s leverage. A business review identified a need to reduce the break-even point of the business, and to restructure its external financing through an injection of additional equity. A prudent financial manager will set the debt component of the company’s capital structure at a level that can be serviced in the worst case event of a fall in profits and a rise in interest rates.

E. e. to changes in the prices of the company’s products ● the risk of government intervention or legislation affecting the company’s business. It was explained earlier that a high financial leverage level exposes a company’s stockholders to the risk of volatile earnings. This risk will be much higher when the company is exposed to significant commercial risks. Operational Leverage Commercial risk can be particularly high in companies with high operating leverage. Operating leverage refers to the cost structure of a company’s operations, and the way in which income changes with an increase or decrease in sales.

Download PDF sample

Rated 4.10 of 5 – based on 40 votes