Chapter 4: MODES OF EXTINGUISHING OBLIGATIONS a) By payment or performance b) Loss of the thing due c) Condonation or remission of the debt d) Confusion or merger e) Compensation f) Novation In addition: g) Annulment h) Rescission i) Fulfillment of a resolutory condition j) Prescription k) Death of a party in case the obligation is personal l) Mutual desistance m) Compromise n) Impossibility of fulfillment o) Happening of fortuitous events PAYMENT or PERFORMANCE
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rupees 80 billion in unpaid loans to banks and tax authorities‚ employees had claims against the company for unpaid amounts. ANALYSIS Q1.Who is obliged to repay a company’s debts: the company‚ promoters‚ shareholders‚ or directors? ANS: Firstly if a director is complying with the law then the company is obliged to repay its debt as it is a separate legal entity from its directors‚ shareholders. Director’s will
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Is college worth it? Some may ask‚ is college worth it? How will I deal with debt from loans? Well‚ for starters‚ college is definitely worth it. College graduates earn more money‚ are more likely to get a job‚ and are more likely to receive benefits such as health care than those with lower education. Let’s start with the benefits of graduating from college. On average‚ college graduates earn more money than those with highschool education. Higher income leads to a higher percentage of not
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sheet for one year‚ you can only use the one year number not an average. Assume interest expense is $0.00 Be careful of the Debt equity ratio. The review covers debt asset ratio as an example of how to calculate ratios and that is different from debt equit and that is different from the debt equity ratio so think about how you calculate the debt equity ratio using the debt asset ratio as an example. Be sure to cite your references Green boxes to be filled in by instructor Ratio Formula (express
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Question 1: was infinity a good LBO candidate? On the basis of our analysis set forth below‚ we believe that Infinity Carpets was not a viable LBO candidate. We have answered this question analyzing the various criteria typically looked in a possible LBO scenario‚ where 1 means low risk and 10 means high risk. Criteria Rank Comments Cyclicality/volatility 7 Strong dependence on housing market even though good record during recession (p. 2‚ paragraph 4). Volatility due to exposure to a volatile
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trying to determine his company’s optimal capital structure. Este must beside whether it should issue long-term debt in the form of bonds (notes + warrants) or long-term publicly traded stock (equity) through the company’s first initial public offering (IPO). Management is seeking $7.5 million in capital in order to (1) pay down its working-capital line of credit‚ (2) repay long-term debt and (3) capital improvements‚ among other things. Pablo Este’s determination will arise from a variety of significant
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Corporation‚ 1996 © The McGraw−Hill Companies‚ 2003 CASE 31 Polaroid Corporation‚ 1996 In late March 1996‚ Ralph Norwood‚ the recently appointed treasurer of Polaroid Corporation‚ reflected on several matters of concern about the firm’s debt policy that would require his attention in the coming months. One immediate concern was Polaroid’s outstanding $150 million‚ 7.25 percent notes‚ which were due to mature in January 1997. Investment bankers‚ keenly interested in garnering advisory
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capital structure: debt financing and equity financing (Cumming 52; Myers‚ 83). Each type has its own advantages and disadvantages‚ and an essential task for the successful manager of a firm is to find an optimal capital structure in terms of risk and reward for stockholders. When making decisions that affect capital structure‚ managers must be aware of the impact capital structure has on the firm’s potential for future success‚ as well as the advantages and disadvantages of debt versus equity financing
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common shares with the proceeds from the sale of debt‚ I can increase earnings per share. After all‚ I can borrow at 10% and I am currently earning 20% on my al l-equity-financed firm. I estimate the beta of the borrowed money at 0.40 and the beta of my equity before borrowing at 1.20. The price-earnings ratio (P/E) of the common shares is 5 on operating income of $25‚000; and I expect to continue to generate that amount of operating income after the debt financing. Seems to me this will be a good
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verge of bankruptcy. Its new CEO Di Camillo is facing a very large debt‚ which is due to mature in six years. Furthermore‚although the company does not perform well in the US market‚ there seems to be still demand in some overseas emerging markets‚ including Russia. However‚ in order for the company to maintain and strengthen its position there‚ they must find a way out of their overdebting and this cannotb be done unless th3e debt is restructured. Given the situation described in detail in the case
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