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What factors associated with debt vs. equity financing might influence price-earnings multiples? |
What factors associated with debt vs. equity financing might influence price-earnings multiples? It deals with the capital structure of the company. As the company has more debt and less equity, it's more highly levered and thus more risky, leading to a higher P/E. With more stock than equity, there's less risk, which would probably trade at a lower P/E. I might have goofed the signs. I wasn't really sure. But, eh, oh well, I'm sure you figured out the right answer. :) Report It Heh, yes, thanks, I did :) Share price is also a component of the P/E multiple; as risk increases, share price drops, raising the multiple, and vice-versa. Couldn't have done it without your tip, though! Report It You broke my brain with that one! As Forrest Gump said, "Stupid is as stupid does." I'm almost inspired to go jump in the lake. collectable debt and realizable equity!! |
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It depends upon what you are financing. If it is something that should hold its value like a home then the risk is lower. If you are opening a new startup business and getting a home equity loan ... Financing with debt provides provides interest tax shield as interest expense is tax deductible, whereas if financing is done by equity, the dividends distributed are not tax deductible. ...Need clarification as to the facts to be able to answer your question. Did the partnership borrow? If so, from whom did the partnership borrow? Or did the partnership loan funds to the partners ... It will depend on how much the home appraises for. You could possibly come out with extra money to pay off debts if the equity is there. If you are a member of a credit union, ask a loan officer. Try the link below...they may be of service to you. In order to maintain a good credit rating, one should not "let it go back". Sell Your Used Car. Autobytel.com provides your classif... check out the debt company with the better business breau and collectors for credit card companies will say anthing to get you to pay. i have not paid one of my credit cards for over a year because... Well, have you thought about selling your current home and moving somewhere more affordable? That would take alot off your back! I know how easy it is to get in debt, I have struggled with it mys... The burden is the fact that it could be earning you more money elsewhere. Let's give an example: Assume you have the option to buy a car at 1.9% financing or paying for it outright. Which... |
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