PPT-Capital Structure Refers to the mix of debt and equity that a company uses to finance

Capital Restructuring Capital restructuring involves changing the amount of leverage a firm has without changing the firms assets The firm can increase leverage by issuing debt and repurchasing outstanding shares. Private equity. Corporate Financial Strategy. 4th edition. Dr Ruth Bender. Private equity: . contents. Learning objectives. The universe of equity investment. Structure of a typical private equity fund. Capital Structure. Presenter’s name. Presenter’s title. dd. Month . yyyy. 1. Introduction. The capital structure decision affects financial risk and, hence, the value of the company.. The capital structure theory helps us understand the factors most important in the relationship between capital structure and the value of the company.. Financing a Firm with Equity. You are considering an investment opportunity. . For an initial investment of $800 this year, the project will generate cash flows of either $1400 or $900 next year, depending on whether the economy is strong or weak, respectively. Both scenarios are equally likely.. Corporate Finance 35. Capital structure: An introduction to the debate. Different types of gearing. The effect of gearing. Differentiate business and financial risk. The underlying assumptions, rationale and conclusions of Modigliani and Miller’s models in a world without tax. Lecture Eleven – Capital Structure. Learning Objectives. Explain why borrowing rates are different based on ability to repay loans.. Demonstrate the benefits of borrowing. . Calculate the break-even EBIT for different capital structures.. Presented by Dr. Monika Aggarwal. . Post Graduate Govt. College, CHD. 1. Objectives of the Study. Understand the theories of the . relationship. . between capital structure and the value of the firm. THE NEED FOR CAPITAL. START-UP OR VENTURE CAPITAL. WORKING CAPITAL. INVESTMENT CAPITAL. START-UP CAPITAL . – “Seed money” which is simply the money needed to begin one’s business, to pay your first rent, licensing fees and all costs associated with starting a business.. Corporate Finance 36. Capital structure: further considerations. Capital structure in a world with tax. Financial distress. Agency costs. Borrowing capacity. Managerial preferences. Pecking order. Financial slack. 13 May 2014. Michael Neary. Partner, Corporate Finance. Overview of presentation . Topic. Time. Presentation on SME financing. 8.30 – 9.55. Break. 9.55 –. 10.10. Case Study . 10.10– 11.00. Introduction. Capital Structure in a Perfect Market Chapter 14 outline Equity and or debt financing Return on levered equity Modigliani-Miller theorems: MM1: firm value not affected MM2: expected returns are affected Petitioners Exhibit No 13 Glossary of Acronyms CenterPoint CenterPoint Energy Inc Company Southern Indiana Gas and Electric Company d/b/a Vectren Energy Delivery of Indiana Inc FSA Financial Services Leveraged Finance simply means funding a company or business unit with more debt than would be considered normal for that company or industry.. Higher-than-normal debt implies that the funding may be riskier, and therefore more costly, than normal borrowing -- higher credit spreads and fees. It is often also more complex with covenants and waterfalls.. Private Equity. Private equity can be broadly defined to include the following different forms of investment:. Leveraged Buyout: Leveraged buyout (LBO) refers to a control purchase of all or most of a company or a business unit by using equity from a small group of investors in combination with a significant amount of debt (the targets of LBOs are typically mature companies that generate strong operating cash flow). Theories of capital structure . . Value of firm(V) = EBIT/. K. o. Two school of thoughts. :. Financing decision affects the valuation. Net Income Approach(NI). Financing decision does not affect the valuation.