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What is near equity?
Near-equity investments consist of debt that is convertible to equity and debt with warrants, royalties or participation payments. Near-equity can be structured to act like equity, with deferred payments that give young firms the patient capital they need in their early years. http://www.frbsf.org/publications/community/review/122006/rubin.pdf
What is meant by the statement common stockholder have a residual claim on the issuing firms assets?
The statement that common stockholders have a residual claim on the issuing firm's assets means that they are entitled to what remains after all other obligations, such as debts and preferred stock dividends, have been satisfied. In the event of liquidation, common stockholders are the last to be paid, receiving any leftover assets only after creditors and preferred shareholders have been compensated. This reflects the higher risk associated with holding common stock compared to other forms of equity or debt.
An advantage of bond financing is?
An advantage of bond financing is: a) Bonds do not affect owners' control. b) Interest on bonds is tax deductible. c) Bonds can increase return on equity. d) It allows firms to trade on the equity. e) All of the above.
Why the increased use of debt increases the financial risk of the equity shareholder and hence the cost of equity increases?
Increased use of debt amplifies financial risk for equity shareholders because debt obligations must be met regardless of a company's performance, leading to higher volatility in earnings and cash flow. This heightened risk makes equity less attractive to investors, who demand a higher return to compensate for the increased uncertainty associated with leveraged firms. Consequently, the cost of equity rises as shareholders require greater compensation for the risk they undertake.
Why does a prospective stockholders of a firm interested in a firms financial statement?
Prospective stockholders are interested in a firm's financial statements because these documents provide critical insights into the company's financial health, profitability, and operational efficiency. By analyzing income statements, balance sheets, and cash flow statements, investors can assess the firm's performance, understand its revenue sources, and evaluate its ability to generate returns on their investment. Additionally, these statements help stockholders identify potential risks and make informed decisions about whether to buy, hold, or sell shares. Overall, financial statements are essential for evaluating the viability and future growth prospects of the firm.
Where can you find lists of private equity firms?
a list of Connecticut private equity firms
Private Equity?
With the presidential race heating up in the U.S. and the background of one of the candidates in the private equity sector, I thought it might be a good idea to talk about private equity firms and what type of work they do. I promise, no partisanship or politics; nothing but straight-up finance goodness for you. Mitt Romney was one of the founders of a private equity firm called Bain Capital. So exactly what does a private equity firm do? Essentially private equity firms invest in private firms. They take an equity stake in the firm, just as you would do if you bought some stock in a publically traded corporation. The difference is that the companies that the private equity firm is dealing with are not publically traded. They can be family businesses or long-term privately held firms. One thing that is often the case with firms that become part of a private equity dealing is that they have come upon some rough times. Though it’s not always the case, often private equity firms will seek to make an investment in a distressed company and help it turn around. When a private equity firm takes a stake in a private company it usually places some of its own people on the board or in other leadership roles. They then focus on turning a profit, which benefits the company, its original owners, and the new stakeholders; the private equity firm. One mistake that some people make is to confuse private equity firms with venture capital firms. There is a difference; though some firms might dabble a little in both, usually PE and VC firms play to their strengths. Both private equity and venture capital firms take an equity stake in a privately-held firm and both seek to turn a profit through their involvement, there is a key difference; private equity firms typically deal with established companies and venture capital firms deal with start-ups.
Where can you find a list of small to mid size US private equity firms?
Where can you find a list of small to mid size US private equity firms?
What type of regulations exist for private equity firms?
Private equity firms must follow state and federal regulations. New York State is especially strict on these firms in light of recent fraudulent activity.
What are some actions that stockholders can take to ensure that management's and stockholders' interestes are aligned?
Threat of takeover.Managerial compensation: Managerial compensation is constructed not only to retain competent managers, but to align managers' interests with those of stockholders as much as possible.Direct intervention by stock holders: Today, the majority of a company's stock is owned by large institutional investors, such as mutual funds and pensions. These large institutional stockholders have the ability to exert influence on managers and as a result the firms operations.Treat of Firing: If stockholders are unhappy with current management, they can encourage the existing board of directors to change the existing management, or stockholders may even re-elect a new board of directors that will accomplish the task.Threat of takeover: If a stock price deteriorates because of management's inability to run the company effectively, competitors or stockholders may take a controlling interest in the company and bring in their own managers.
What are some actions that stockholders can can take to ensure that management's and stockholders' interest are aligned?
Threat of takeover.Managerial compensation: Managerial compensation is constructed not only to retain competent managers, but to align managers' interests with those of stockholders as much as possible.Direct intervention by stock holders: Today, the majority of a company's stock is owned by large institutional investors, such as mutual funds and pensions. These large institutional stockholders have the ability to exert influence on managers and as a result the firms operations.Treat of Firing: If stockholders are unhappy with current management, they can encourage the existing board of directors to change the existing management, or stockholders may even re-elect a new board of directors that will accomplish the task.Threat of takeover: If a stock price deteriorates because of management's inability to run the company effectively, competitors or stockholders may take a controlling interest in the company and bring in their own managers.
What is the total debt of 1233837 and total assets of 2178990 what is the firms debt to equity ratio?
Debt equity ratio = total debt / total equity debt equity ratio = 1233837 / 2178990 * 100 Debt equity ratio = 56.64%
What are the leading private equity firms in Hong Kong?
Hong Kong is the second largest center of private equity in Asia. Some notable private equity firms here are CDH Investments, RRJ Capital, Baring Private Equity Asia, Affinity Equity Partners, A&F Capital Management, Leopard Capital LP, Mekong Capital, H&Q Asia Pacific, Welkin Group.
Why do firms purchase other corporations when they have a loss tot he acquiring firms stockholders?
Firms may purchase other corporations, even if they themselves have losses because they believe the new firm may have products or processes which will generate new income streams. Some firms are making losses, but they have high financial net-worth.
Where can you find a list of Private Equity firms funding for real estate?
check this out:http://www.pplaw.com/the_firm/special_fundslist.html
What business do private equity firms deal in?
Private equity firms deal with large corporate firms, retail businesses and any other public entity that would desire to make investments directly into a private company or conduct a buyout of a public company in order to de-list that public company and merge that former company into one larger non-traded private company.
What is near equity?
Near-equity investments consist of debt that is convertible to equity and debt with warrants, royalties or participation payments. Near-equity can be structured to act like equity, with deferred payments that give young firms the patient capital they need in their early years. http://www.frbsf.org/publications/community/review/122006/rubin.pdf
