0
What else can I help you with?
What is dept factoring?
Debt factoring or accounts receivable financing is a powerful tool that businesses can use to improve cash flow.
What does wacc measure?
WACC is a component used in finance to measure the company's cost of capital, usually as a discounting factor and the companies use debt or equity for financing.
Why is debt a cheaper form of finance than equity?
This can be easily explain using financial theory. Debt financing is cheaper than equity will hold true only when; 1) your company wiil be taxed on any profits 2) your company will make profits 3) Interest paid on debt financing is tax deductable 4) your company will reach at least the same sales figure with or without debt This is because the benefit of "Tax Sheild" which arised from the fact that government allows interest paid on debt financing to be tax deductable. For example, if your company makes 1 million in profit, if you have debt, you can use interest paid on debt to lower your taxable profit. Therefore, the government will calculate your tax from 1million less interest paid on debt not the full 1million. Saving from paying lower tax will eventually be resulted back into shareholders' pocket. To understand that debt is cheaper financing than equity, you must not look at the ending profit because your net profit will be lower than not having debt BUT the cash flows to shareholders and debt holder will be higher as a result from the transfer of tax saving.
Can a builder require a homebuyer to use a specific lender for financing?
Yes, a builder can require a homebuyer to use a specific lender for financing, but the homebuyer has the right to shop around for other financing options.
How does owner financing work?
Owner financing is a method of financing a house or other item without using the assistance of a realtor or broker. Be sure to use a bank that is familiar with working with individuals for financing.
What is dept factoring?
Debt factoring or accounts receivable financing is a powerful tool that businesses can use to improve cash flow.
4 How do taxes affect the choice of debt versus equity?
Since interest on corporate debt reduces the corporation's overall tax liability, firms are incentivized to finance the acquisition of future assets with debt as opposed to equity. Firms must use proper discretion when determining the capital structure of their business so as to reap the tax incentives of debt while maintaining the proper leverage ratios to allow the firm to remain stable should credit markets begin to lose liquidity as they did at the beginning of the current economic recession. Critics believe that the tax incentives associated with interest on debt cause firms to rely too heavily on debt as a source for financing.
What does wacc measure?
WACC is a component used in finance to measure the company's cost of capital, usually as a discounting factor and the companies use debt or equity for financing.
Why is debt a cheaper form of finance than equity?
This can be easily explain using financial theory. Debt financing is cheaper than equity will hold true only when; 1) your company wiil be taxed on any profits 2) your company will make profits 3) Interest paid on debt financing is tax deductable 4) your company will reach at least the same sales figure with or without debt This is because the benefit of "Tax Sheild" which arised from the fact that government allows interest paid on debt financing to be tax deductable. For example, if your company makes 1 million in profit, if you have debt, you can use interest paid on debt to lower your taxable profit. Therefore, the government will calculate your tax from 1million less interest paid on debt not the full 1million. Saving from paying lower tax will eventually be resulted back into shareholders' pocket. To understand that debt is cheaper financing than equity, you must not look at the ending profit because your net profit will be lower than not having debt BUT the cash flows to shareholders and debt holder will be higher as a result from the transfer of tax saving.
What are the trade-offs between incremental IPO proceeds and debt financing?
An IPO's proceeds are considered equity. It can be arranged to use proceeds to pay off incurred debt or they can be taken gradually in payments. It is a planning matter, whereas, certain penalties apply if funds are withdrawn prematurely.
Where can one get financing on Dell products?
Financing for computer products, like any other type of financing, is based on if it is for personal use or for business use. Dell provides their own financing for most personal home consumer use, and provides leasing options for companies and small businesses.
Can a builder require a homebuyer to use a specific lender for financing?
Yes, a builder can require a homebuyer to use a specific lender for financing, but the homebuyer has the right to shop around for other financing options.
When would one use creative financing?
Creative Financing would mostly be used by bankers or sales associates who are trying to get financing for an individual who would not be eligible for the more common forms of financing.
How does owner financing work?
Owner financing is a method of financing a house or other item without using the assistance of a realtor or broker. Be sure to use a bank that is familiar with working with individuals for financing.
Choose Your Car Financing Wisely?
Financing a car can be almost as tedious as financing your home. When that time comes, be smart and finance your car wisely. Don't be quick to choose financing from a dealership. Their interest rates will always be higher than what you can get from a bank. When choosing a bank, you may want to consider your bank first. They will often offer better financing since your accounts can be linked. If this does not work, consider choosing a local credit union as their rates are often low as well. Use caution when choosing an online loan company for your financing.
What is credit and what is debt?
Credit is having a certain amount of money available on a pre-approved line. Debt is what happens when you use that line of credit and have to repay the money with interest. It is better to save up the money and pay cash or use debit
How do you calculate unlevered cost of capital?
Leverage indicates the use of debt in conjunction with owner's equity to finance an accumulation of assets. The term "unlevered" implies that there is no use of debt to make such asset acquisitions. Therefore, the cost of capital would include the costs associated with equity-only financing. This includes the rate of required return on both preferred and common stock (with their appropriate weighting).
