financial risks is the debt to total capitalization ratio. This ratio measures the portion of a company’s total capital structure that is financed by debts. The ratio is calculated as: According to the balance sheet dated May 31‚ 2014‚ Nike had a total debt of $1.373 billion‚ and total shareholders’ equity of $10.824 billion. Computing these numbers gives a debt to total capital ratio of 11.26%. The balance sheet of Nike shows that there is no preferred stock offered by the company but
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117 Capital Market - Clearing and Settlement IS M R Capital Market - Clearing and Settlement Introduction The transactions in secondary market pass through three distinct phases‚ viz.‚ trading‚ clearing and settlement. While the stock exchanges provide the platform for trading‚ the clearing corporation determines the funds and securities obligations of the trading members and ensures that the trade is settled through exchange of obligations. The clearing banks and the depositories provide
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development of new technologies can bring new competitors to this market. Verizon is exposed to many types of market risk such as interest rate and foreign exchange rate which has an effect on Verizon’s earnings. Below figure 5 summarizes the capital structure of Verizon; it is obvious that company is increasingly depending on debt to finance its overall operations. This approach can be attributed to its deal with Vodafone to obtain the 45% stake in Verizon’s using the low interest rate offer to fund
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Capital Structure and Debt Structure* Joshua D. Rauh Kellogg School of Management and NBER Amir Sufi University of Chicago Booth School of Business and NBER February 2010 *We thank Doug Diamond‚ Anil Kashyap‚ Gordon Phillips‚ Michael Roberts‚ Toni Whited‚ Luigi Zingales‚ and seminar participants at Emory University‚ Georgetown University‚ Maastricht University‚ Rice University‚ Tilburg University‚ the University of California-Berkeley‚ the University of Chicago‚ the University of Colorado
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OPTIMAL CAPITAL STRUCTURE The optimal capital structure for a company should be the mix of equity‚ debt and hybrid instruments that minimizes the overall cost of funding‚ i.e. it should minimize the company’s weighted average cost of capital. In practice‚ however‚ it is not possible to specify this optimal capital structure exactly‚ for any individual company. It clearly makes sense to obtain funds at the lowest possible cost. In the long run‚ debt is cheaper than equity. However‚ when a company’s
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Verizon and MCI: A Merger that Promotes Competition August 2005 POLICY STUDY No. 05-1 by Richard E. Wagner Harris Professor of Economics George Mason University; Fairfax‚ VA and Senior Fellow‚ Public Interest Institute Mt. Pleasant‚ IA POLICY STUDY August 2005 No. 05-1 Public Interest Institute Dr. Don Racheter‚ President Verizon and MCI: A Merger that Promotes Competition POLICY STUDIES are published as needed. They are longer‚ analytical articles on important
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you would read the topic theories of capital structure. Here‚ I have made these theories simplified. I hope‚ you can study these theories here and use these theories as reference. We all know that capital structure is combination of sources of funds in which we can include two main sources’ proportion. One is share capital and other is Debt. All four theories are just explaining the effect of changing the proportion of these sources on the overall cost of capital and total value of firm. If I have
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The electronic private automatic branch exchange (EPABX) is equipment that has made day-to-day working in the offices much simpler‚ especially in the area of communication. The EPABX may be defined as a switching system that makes available both internal and external stitching functions of any organisation. The selection of an EPBAX is a difficult task and requires deep knowledge of traffic pattern of the office. By using an EPABX both the internal and external needs of the organisation are
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prudent and sustainable funding sources‚ to add to their current funding mix. This is leading to a renewed interest in structured asset-backed financing solutions‚ designed to give treasurers the opportunity to rebalance and re-engineer their capital structures by offering well-priced‚ longer maturity alternatives. By securing a funding solution on the assets already owned by the company‚ or assets that will be essential to the business‚ it is possible to rebalance pricing models in a company’s favour
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Journal of Finance and Investment Analysis‚ vol.1‚ no.2‚ 2012‚ 61-81 ISSN: 2241-0988 (print version)‚ 2241-0996 (online) International Scientific Press‚ 2012 Topic: capital structure determinants of quoted firms in Nigeria and lessons for corporate financing decisions Michael Nwidobie Barine1 Abstract Financial arrangements determine how and the amount of financing that can be obtained from fund providers. An optimal allocation between equity and debt is determined by the trade-off between
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