Strategic moves analysis in the common-vs-convertible investment decision
Article Abstract:
Strategic analysis can help treasury managers make investment decisions that facilitate achieving corporate investment goals. By analyzing strategic trading moves, managers will be able to make better decisions about which investment security to buy and when to buy it. Strategic moves analysis is applied to the decision of whether to invest in convertible debt securities or their underlying common shares. The securities' characteristics are analyzed in terms of three broad investment objectives - safety of principal, capital appreciation prospects, and income prospects - and are then ranked in terms of corporate investment priorities. An ongoing trading strategy can then be made, based on an understanding of strategic moves.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1986
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Squeezing cash: how to make an LBO work
Article Abstract:
Multiples of earnings before interest and taxes, and earnings before interest, taxes, and depreciation are often the basis of leveraged buyouts. A management commitment to maximize the cash flow necessary for the reduction of the debt burden is essential for success. One important source of cash flow is the potential difference between depreciation expense and capital expenditure. Sometimes assets are sold or other sources are found within the balance sheet. Debt capacity can be affected by the structure of leveraged buyout financing. The significant risk of higher interest rates can be hedged by interest rate swaps, Eurodollar futures, and interest rate caps.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1988
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