Search results
Results from the WOW.Com Content Network
Such recapitalizations are executed via issuing bonds to raise money and using the proceeds to buy the company's stock or to pay dividends. Such a maneuver is called a leveraged buyout when initiated by an outside party, or a leveraged recapitalization when initiated by the company itself for internal reasons.
In finance, leverage, also known as gearing, is any technique involving borrowing funds to buy an investment. Financial leverage is named after a lever in physics, which amplifies a small input force into a greater output force, because successful leverage amplifies the smaller amounts of money needed for borrowing into large amounts of profit.
Investors can use homemade leverage to change an unleveraged firm into a leveraged firm. [ 1 ] [ 2 ] According to the Corporate Finance Institute , "the founding philosophy of homemade leverage is the Modigliani–Miller theorem , which assumes an efficient market and the absence of corporate taxes and bankruptcy costs."
The investor has to finance with their own capital the difference between the value of the collateral and the asset price, known as the margin. Thus the asset becomes leveraged. The need to partially finance the transaction with the investor's own capital implies that their ability to buy assets is limited by their capital at any given time.
“Financial planning is important enough that you need to be a proactive participant.” And that doesn’t mean you have to spend a lot of time every year worrying about your financial situation.
More generally, the serious risks in options trading are well-established and customers must be explicitly approved for options trading. The U.S. Financial Industry Regulatory Authority (FINRA) suggests that firms "consider" whether purchasers of some or all structured products should be required to go through a similar approval process, so ...
Type of business acquisition loan. Description. SBA 7(a) loan. A government-backed loan designed to help businesses that don’t qualify for conventional business loans, offering low interest ...
In finance, a trade is an exchange of a security such as stocks, bonds, commodities, currencies, derivatives or any valuable financial instrument for "cash". Such a financial transaction is usually done by participants of an exchange such as a stock exchange, commodity exchange or futures exchange with a short-dated promise to pay in the currency of the country where the 'exchange' is located.