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Leverage (finance)

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156:, like many previous financial crises, was blamed in part on excessive leverage. Consumers in the United States and many other developed countries had high levels of debt relative to their wages and the value of collateral assets. When home prices fell, and debt interest rates reset higher, and business laid off employees, borrowers could no longer afford debt payments, and lenders could not recover their principal by selling collateral. Financial institutions were highly levered. 219:
more than offset the additional risk from leverage. Or if an investor uses a fraction of his or her portfolio to margin stock index futures (high risk) and puts the rest in a low-risk money-market fund, he or she might have the same volatility and expected return as an investor in an unlevered low-risk equity-index fund. Or if both long and short positions are held by a pairs-trading stock strategy the matching and off-setting economic leverage may lower overall risk levels.
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certain kind of asset (from the left hand side of the balance sheet). A capital requirement is a fraction of assets (from the left hand side of the balance sheet) that must be held as a certain kind of liability or equity (from the right hand side of the balance sheet). Before the 1980s, regulators typically imposed judgmental capital requirements, a bank was supposed to be "adequately capitalized," but these were not objective rules.
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to rapid ruin, for even if the underlying asset value decline is mild or temporary the debt-financing may be only short-term, and thus due for immediate repayment. The risk can be mitigated by negotiating the terms of leverage, by maintaining unused capacity for additional borrowing, and by leveraging only liquid assets which may rapidly be converted to cash.
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led to calls to reimpose leverage limits, by which most people meant accounting leverage limits, if they understood the distinction at all. However, in view of the problems with Basel I, it seems likely that some hybrid of accounting and notional leverage will be used, and the leverage limits will be
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This may happen exactly at a time when there is little market liquidity, i.e. a paucity of buyers, and sales by others are depressing prices. It means that as market price falls, leverage goes up in relation to the revised equity value, multiplying losses as prices continue to go down. This can lead
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While Basel I is generally credited with improving bank risk management it suffered from two main defects. It did not require capital for all off-balance sheet risks (there was a clumsy provisions for derivatives, but not for certain other off-balance sheet exposures) and it encouraged banks to pick
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owners of businesses leverage their investment by having the business borrow a portion of its needed financing. The more it borrows, the less equity it needs, so any profits or losses are shared among a smaller base and are proportionately larger as a result. Businesses leverage their operations by
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is a fraction of assets that is required to be funded in the form of equity or equity-like securities. Although these two are often confused, they are in fact opposite. A reserve requirement is a fraction of certain liabilities (from the right hand side of the balance sheet) that must be held as a
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There is an implicit assumption in that account, however, which is that the underlying leveraged asset is the same as the unleveraged one. If a company borrows money to modernize, add to its product line or expand internationally, the extra trading profit from the additional diversification might
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Risk may depend on the volatility in value of collateral assets. Brokers may demand additional funds when the value of securities held declines. Banks may decline to renew mortgages when the value of real estate declines below the debt's principal. Even if cash flows and profits are sufficient to
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Work on Basel II began in the early 1990s and it was implemented in stages beginning in 2005. Basel II attempted to limit economic leverage rather than accounting leverage. It required advanced banks to estimate the risk of their positions and allocate capital accordingly. While this is much more
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and conduits, plus various lending commitments, contractual payments and contingent obligations. On the other hand, almost half of Lehman's balance sheet consisted of closely offsetting positions and very-low-risk assets, such as regulatory deposits. The company emphasized "net leverage", which
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So while adding leverage to a given asset always adds risk, it is not the case that a levered company or investment is always riskier than an unlevered one. In fact, many highly levered hedge funds have less return volatility than unlevered bond funds, and normally heavily indebted low-risk
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standard. Basel I categorized assets into five risk buckets, and mandated minimum capital requirements for each. This limits accounting leverage. If a bank is required to hold 8% capital against an asset, that is the same as an accounting leverage limit of 1/.08 or 12.5 to 1.
536: 737:{\displaystyle {\begin{aligned}{\text{Operating leverage}}&={\frac {{\text{Revenue}}-{\text{Variable Cost}}}{{\text{Revenue}}-{\text{Variable Cost}}-{\text{Fixed Cost}}}}={\frac {{\text{Revenue}}-{\text{Variable Cost}}}{\text{Operating Income}}}\end{aligned}}} 466: 544: 783: 46:
in physics, which amplifies a small input force into a greater output force, because successful leverage amplifies the smaller amounts of money needed for borrowing into large amounts of profit. However, the technique also involves the high
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There are several variants of each of these definitions, and the financial statements are usually adjusted before the values are computed. Moreover, there are industry-specific conventions that differ somewhat from the treatment above.
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Leveraging enables gains to be multiplied. On the other hand, losses are also multiplied, and there is a risk that leveraging will result in a loss if financing costs exceed the income from the asset, or the value of the asset falls.
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of not being able to pay back a large loan. Normally, a lender will set a limit on how much risk it is prepared to take and will set a limit on how much leverage it will permit, and would require the acquired asset to be provided as
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the riskiest assets in each bucket (for example, the capital requirement was the same for all corporate loans, whether to solid companies or ones near bankruptcy, and the requirement for government loans was zero).
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Huffman, Stephen P., "The Impact of Degrees of Operating and Financial Leverage on the Systematic Risk of Common Stock: Another Look," Quarterly Journal of Business & Economics (Winter 1989), pp. 83–100.
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Dugan, Michael T., Donald Minyard, and Keith A. Shriver, "A Re-examination of the Operating Leverage-Financial Leverage Tradeoff," Quarterly Review of Economics & Finance (Fall 1994), pp. 327–334.
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For outsiders, it is hard to calculate operating leverage as fixed and variable costs are usually not disclosed. In an attempt to estimate operating leverage, one can use the percentage change in
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Darrat, Ali F.d and Tarun K. Mukherjee, "Inter-Industry Differences and the Impact of Operating and Financial Leverages on Equity Risk," Review of Financial Economics (Spring 1995), pp. 141–155.
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While leverage magnifies profits when the returns from the asset more than offset the costs of borrowing, leverage may also magnify losses. A corporation that borrows too much money might face
160:, for example, in its last annual financial statements, showed accounting leverage of 31.4 times ($ 691 billion in assets divided by $ 22 billion in stockholders' equity). Bankruptcy examiner 176:
transactions. At the end of 2007, Lehman had $ 738 billion of notional derivatives in addition to the assets above, plus significant off-balance sheet exposures to special purpose entities,
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Saita, Francesco, Value at Risk and Bank Capital Management: Risk Adjusted Performances, Capital Management and Capital Allocation Decision Making, Academic Press (February 3, 2007)
627:{\displaystyle {\text{Degree of Combined Leverage}}={\text{DOL}}\times {\text{DFL}}={\frac {\mathrm {EBIT} +{\text{Fixed Costs}}}{\mathrm {EBIT} -{\text{Total Interest Expense}}}}} 792:
for a one-percent change in revenue. The product of the two is called total leverage, and estimates the percentage change in net income for a one-percent change in revenue.
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Li, Rong-Jen and Glenn V. Henderson, Jr., "Combined Leverage and Stock Risk," Quarterly Journal of Business & Finance (Winter 1991), pp. 18–39.
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are effectively leveraged bets between parties where the principal is implicitly borrowed and lent at interest rates of very short treasury bills.
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will lose 40% if the stock declines 20%.; also in this case the involved subject might be unable to refund the incurred significant total loss.
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Report of Anton R. Valukas, Examiner, to the United States Bankruptcy Court, Southern District of New York, Chapter 11 Case No. 08-13555 (JMP).
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of equity divided by volatility of an unlevered investment in the same assets. For example, assume a party buys $ 100 of a 10-year fixed-rate
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determined that the true accounting leverage was higher: it had been understated due to dubious accounting treatments including the so-called
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rational in theory, it is more subject to estimation error, both honest and opportunitistic. The poor performance of many banks during the
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National regulators began imposing formal capital requirements in the 1980s, and by 1988 most large multinational banks were held to the
531:{\displaystyle {\text{Degree of Financial Leverage}}={\frac {\mathrm {EBIT} }{\mathrm {EBIT} -{\text{Total Interest Expense}}}}} 203:
or default during a business downturn, while a less-leveraged corporation might survive. An investor who buys a stock on 50%
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excluded these assets. On that basis, Lehman held $ 373 billion of "net assets" and a "net leverage ratio" of 16.1.
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leverage is total notional amount of assets plus total notional amount of liabilities divided by equity.
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may leverage their assets by financing a portion of their portfolios with the cash proceeds from the
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Ong, Michael K., The Basel Handbook: A Guide for Financial Practitioners, Risk Books (December 2003)
778:{\displaystyle {\text{Financial leverage}}={\frac {\text{Total Debt}}{\text{Shareholders' Equity}}}} 190: 1781: 1758: 1696: 1522: 1447: 1407: 1387: 140: 1492: 1482: 1452: 1422: 1362: 864:
Mock, E. J., R. E. Schultz, R. G. Schultz, and D. H. Shuckett, Basic Financial Management (1968).
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Before the 1980s, quantitative limits on bank leverage were rare. Banks in most countries had a
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Lang, Larry; Eli Ofek; Rene M. Stulz (January 1996). "Leverage, Investment, and Firm Growth".
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Ghosh, Dilip K.; Robert G. Sherman (June 1993). "Leverage, Resource Allocation and Growth".
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Bodie, Zvi, Alex Kane and Alan J. Marcus, Investments, McGraw-Hill/Irwin (June 18, 2008)
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Tarullo, Daniel K., Banking on Basel: The Future of International Financial Regulation,
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are expected to maintain a leverage ratio in excess of 3%. The ratio is defined as
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Lehman Brothers Holdings Inc Annual Report for year ended November 30, 2007
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Grunewald, Adolph E. and Erwin E. Nemmers, Basic Managerial Finance (1970).
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imposed in addition to, not instead of, Basel II economic leverage limits.
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There are several ways to define operating leverage, the most common. is:
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Bartram, Söhnke M.; Brown, Gregory W.; Waller, William (August 2015).
308:{\displaystyle {\frac {\mbox{Tier 1 Capital}}{\mbox{Total exposure}}}} 1487: 1350: 1087:
Damodaran (2011), Applied Corporate Finance, 3rd ed., pp. 132–133>
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Weston, J. Fred and Eugene F. Brigham, Managerial Finance (1969).
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inputs when revenues are expected to be variable. An increase in
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Brigham, Eugene F., Fundamentals of Financial Management (1995)
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maintain the ongoing borrowing costs, loans may be called-in.
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Leverage can arise in a number of situations. Securities like
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to convert the payments to floating rate. The derivative is
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Accounting leverage is total assets divided by the total
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Managing Derivative Risks: The Use and Abuse of Leverage
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are usually less risky stocks than unlevered high-risk
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The use of borrowed funds in the purchase of an asset
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Englewood Cliffs, N.J., Prentice-Hall. 1014: 239:The term leverage is used differently in 325:items and derivative "add-ons", whereas 195:Financial risk management § Banking 110:Financial risk management § Banking 1805: 250: 1174: 853:Fundamentals of Financial Management 370: 346: 335: 191:Derivative (finance) § Leverage 88:will result in a larger increase in 42:Financial leverage is named after a 13: 1138:"How Important is Financial Risk?" 1129: 609: 606: 603: 600: 585: 582: 579: 576: 513: 510: 507: 504: 498: 495: 492: 489: 452: 449: 446: 443: 438: 435: 432: 429: 426: 422: 419: 416: 413: 410: 402: 399: 396: 393: 14: 1829: 1786: 1776: 1117: 1108: 1099: 1090: 1081: 1060: 1051: 1019:Financial Management and Policy 961: 331:Basel III § Leverage ratio 1573:Debtor-in-possession financing 932: 902:Journal of Financial Economics 893: 876: 867: 234: 178:structured investment vehicles 1: 836: 154:financial crisis of 2007–2008 148:Financial crisis of 2007–2008 141:financial crisis of 2007–2009 1513:Staggered board of directors 480:Degree of Financial Leverage 384:Degree of Operating Leverage 7: 1630:Accretion/dilution analysis 1000:Chew, Lillian (July 1996). 799: 550:Degree of Combined Leverage 31:is any technique involving 10: 1834: 1593:Leveraged recapitalization 266: 188: 107: 103: 1818:Financial risk management 1772: 1764:Valuation using multiples 1749:Sum-of-the-parts analysis 1719:Modigliani–Miller theorem 1620: 1578:Dividend recapitalization 1558: 1406: 1393:Secondary market offering 1296: 1285: 1212: 1155:10.1017/S0022109015000216 100:sale of other positions. 1782:List of investment banks 1697:Free cash flow to equity 1523:Super-majority amendment 1448:Management due diligence 1388:Seasoned equity offering 1004:. John Wiley & Sons. 1493:Shareholder rights plan 1483:Post-merger integration 1453:Managerial entrenchment 1423:Contingent value rights 1363:Initial public offering 184: 1635:Adjusted present value 1498:Special-purpose entity 1336:Direct public offering 1306:At-the-market offering 779: 738: 628: 618:Total Interest Expense 532: 522:Total Interest Expense 462: 309: 1650:Conglomerate discount 780: 739: 629: 533: 463: 351:Economic leverage is 310: 189:Further information: 1672:Economic value added 1667:Discounted cash flow 1068:"Financial Leverage" 942:(September 30, 2008) 851:Brigham, Eugene F., 831:Repurchase agreement 771:Shareholders' Equity 754: 644: 545: 475: 379: 288: 1257:Senior secured debt 889:. pp. 575–582. 251:Accounting leverage 120:capital requirement 116:reserve requirement 54:collateral security 1792:Outline of finance 1704:Market value added 1687:Financial modeling 1645:Business valuation 1568:Debt restructuring 1346:Follow-on offering 1331:Corporate spin-off 1289:(terms/conditions) 1206:investment banking 1015:Van Horne (1971). 826:Operating leverage 775: 759:Financial leverage 734: 732: 653:Operating leverage 624: 528: 458: 361:interest rate swap 305: 302: 297: 1800: 1799: 1724:Net present value 1709:Minority interest 1640:Associate company 1616: 1615: 1583:Financial sponsor 1503:Special situation 1473:Pre-emption right 1463:Minority discount 1373:Private placement 1272:Subordinated debt 1227:Exchangeable debt 1214:Capital structure 1202:Corporate finance 811:Homemade leverage 773: 772: 769: 760: 728: 727: 722: 714: 703: 700: 692: 684: 677: 669: 654: 622: 619: 595: 567: 559: 551: 526: 523: 481: 456: 385: 371:Corporate finance 365:off-balance sheet 347:Economic leverage 336:Notional leverage 323:off-balance sheet 303: 301: 296: 245:corporate finance 174:off-balance sheet 170:Ernst & Young 1825: 1790: 1789: 1780: 1779: 1682:Fairness opinion 1677:Enterprise value 1660:Weighted average 1588:Leveraged buyout 1443:Drag-along right 1341:Equity carve-out 1298:Equity offerings 1294: 1293: 1290: 1262:Shareholder loan 1247:Second lien debt 1242:Preferred equity 1222:Convertible debt 1195: 1188: 1181: 1172: 1171: 1167: 1157: 1124: 1121: 1115: 1112: 1106: 1103: 1097: 1094: 1088: 1085: 1079: 1078: 1076: 1074: 1064: 1058: 1055: 1049: 1046: 1035: 1034: 1022: 1012: 1006: 1005: 997: 986: 983: 968: 965: 959: 954: 943: 936: 930: 927: 918: 915: 906: 905: 904:. pp. 3–29. 897: 891: 890: 880: 874: 871: 865: 862: 856: 849: 821:Margin (finance) 816:Leveraged buyout 790:operating income 784: 782: 781: 776: 774: 770: 767: 766: 761: 758: 743: 741: 740: 735: 733: 729: 726:Operating Income 725: 724: 723: 720: 715: 712: 709: 704: 702: 701: 698: 693: 690: 685: 682: 679: 678: 675: 670: 667: 664: 655: 652: 633: 631: 630: 625: 623: 621: 620: 617: 612: 597: 596: 593: 588: 573: 568: 565: 560: 557: 552: 549: 537: 535: 534: 529: 527: 525: 524: 521: 516: 501: 487: 482: 479: 467: 465: 464: 459: 457: 455: 441: 391: 386: 383: 314: 312: 311: 306: 304: 299: 294: 292: 225:public utilities 162:Anton R. Valukas 90:operating profit 1833: 1832: 1828: 1827: 1826: 1824: 1823: 1822: 1803: 1802: 1801: 1796: 1768: 1744:Stock valuation 1739:Residual income 1655:Cost of capital 1612: 1608:Project finance 1598:High-yield debt 1554: 1533:Tag-along right 1458:Mandatory offer 1428:Control premium 1409: 1402: 1378:Public offering 1326:Bought out deal 1288: 1287: 1281: 1208: 1199: 1132: 1130:Further reading 1127: 1122: 1118: 1113: 1109: 1104: 1100: 1095: 1091: 1086: 1082: 1072: 1070: 1066: 1065: 1061: 1056: 1052: 1047: 1038: 1031: 1013: 1009: 998: 989: 984: 971: 966: 962: 955: 946: 937: 933: 928: 921: 916: 909: 898: 894: 881: 877: 872: 868: 863: 859: 850: 843: 839: 806:Coupon leverage 802: 765: 757: 755: 752: 751: 731: 730: 719: 711: 710: 708: 697: 689: 681: 680: 674: 666: 665: 663: 656: 651: 647: 645: 642: 641: 616: 599: 598: 592: 575: 574: 572: 564: 556: 548: 546: 543: 542: 520: 503: 502: 488: 486: 478: 476: 473: 472: 442: 392: 390: 382: 380: 377: 376: 373: 349: 338: 291: 289: 286: 285: 269: 253: 237: 197: 187: 158:Lehman Brothers 150: 112: 106: 33:borrowing funds 17: 12: 11: 5: 1831: 1821: 1820: 1815: 1798: 1797: 1795: 1794: 1784: 1773: 1770: 1769: 1767: 1766: 1761: 1759:Terminal value 1756: 1751: 1746: 1741: 1736: 1731: 1726: 1721: 1716: 1711: 1706: 1701: 1700: 1699: 1692:Free cash flow 1689: 1684: 1679: 1674: 1669: 1664: 1663: 1662: 1652: 1647: 1642: 1637: 1632: 1626: 1624: 1618: 1617: 1614: 1613: 1611: 1610: 1605: 1603:Private equity 1600: 1595: 1590: 1585: 1580: 1575: 1570: 1564: 1562: 1556: 1555: 1553: 1552: 1547: 1546: 1545: 1535: 1530: 1525: 1520: 1515: 1510: 1505: 1500: 1495: 1490: 1485: 1480: 1475: 1470: 1465: 1460: 1455: 1450: 1445: 1440: 1435: 1430: 1425: 1420: 1414: 1412: 1404: 1403: 1401: 1400: 1395: 1390: 1385: 1380: 1375: 1370: 1365: 1360: 1359: 1358: 1348: 1343: 1338: 1333: 1328: 1323: 1318: 1313: 1308: 1302: 1300: 1291: 1283: 1282: 1280: 1279: 1274: 1269: 1264: 1259: 1254: 1249: 1244: 1239: 1234: 1232:Mezzanine debt 1229: 1224: 1218: 1216: 1210: 1209: 1198: 1197: 1190: 1183: 1175: 1169: 1168: 1148:(4): 801–824. 1131: 1128: 1126: 1125: 1116: 1107: 1098: 1089: 1080: 1059: 1050: 1036: 1029: 1007: 987: 969: 960: 944: 931: 919: 907: 892: 875: 866: 857: 840: 838: 835: 834: 833: 828: 823: 818: 813: 808: 801: 798: 786: 785: 764: 745: 744: 718: 707: 696: 688: 673: 662: 659: 657: 650: 649: 635: 634: 615: 611: 608: 605: 602: 591: 587: 584: 581: 578: 571: 563: 555: 539: 538: 519: 515: 512: 509: 506: 500: 497: 494: 491: 485: 469: 468: 454: 451: 448: 445: 440: 437: 434: 431: 428: 424: 421: 418: 415: 412: 408: 404: 401: 398: 395: 389: 372: 369: 348: 345: 337: 334: 327:Tier 1 capital 319: 318: 317: 316: 300:Total exposure 295:Tier 1 Capital 268: 265: 252: 249: 236: 233: 186: 183: 149: 146: 105: 102: 27:also known as 15: 9: 6: 4: 3: 2: 1830: 1819: 1816: 1814: 1811: 1810: 1808: 1793: 1785: 1783: 1775: 1774: 1771: 1765: 1762: 1760: 1757: 1755: 1752: 1750: 1747: 1745: 1742: 1740: 1737: 1735: 1732: 1730: 1727: 1725: 1722: 1720: 1717: 1715: 1712: 1710: 1707: 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1275: 1273: 1270: 1268: 1265: 1263: 1260: 1258: 1255: 1253: 1250: 1248: 1245: 1243: 1240: 1238: 1235: 1233: 1230: 1228: 1225: 1223: 1220: 1219: 1217: 1215: 1211: 1207: 1203: 1196: 1191: 1189: 1184: 1182: 1177: 1176: 1173: 1165: 1161: 1156: 1151: 1147: 1143: 1139: 1134: 1133: 1120: 1111: 1102: 1093: 1084: 1069: 1063: 1054: 1045: 1043: 1041: 1032: 1030:9780133153095 1026: 1021: 1020: 1011: 1003: 996: 994: 992: 982: 980: 978: 976: 974: 964: 958: 953: 951: 949: 941: 935: 926: 924: 914: 912: 903: 896: 888: 887: 879: 870: 861: 854: 848: 846: 841: 832: 829: 827: 824: 822: 819: 817: 814: 812: 809: 807: 804: 803: 797: 793: 791: 762: 750: 749: 748: 721:Variable Cost 716: 705: 694: 691:Variable Cost 686: 676:Variable Cost 671: 660: 658: 640: 639: 638: 613: 589: 569: 561: 553: 541: 540: 517: 483: 471: 470: 406: 387: 375: 374: 368: 366: 362: 358: 357:treasury bond 354: 344: 342: 333: 332: 328: 324: 284: 283: 282: 281: 280: 278: 274: 264: 262: 258: 248: 246: 242: 232: 230: 226: 220: 216: 212: 208: 206: 202: 196: 192: 182: 179: 175: 171: 167: 163: 159: 155: 145: 142: 136: 132: 129: 124: 121: 117: 111: 101: 99: 95: 91: 87: 83: 78: 74: 70: 65: 61: 59: 55: 50: 45: 40: 38: 34: 30: 26: 22: 1734:Real options 1559: 1550:Tender offer 1410:acquisitions 1398:Underwriting 1383:Rights issue 1286:Transactions 1145: 1141: 1119: 1110: 1101: 1092: 1083: 1071:. Retrieved 1062: 1053: 1018: 1010: 1001: 963: 934: 901: 895: 884: 878: 869: 860: 852: 794: 787: 746: 636: 350: 339: 320: 270: 259:minus total 254: 238: 221: 217: 213: 209: 198: 168:(allowed by 151: 137: 133: 125: 113: 66: 62: 41: 28: 24: 18: 1508:Squeeze-out 1478:Proxy fight 1408:Mergers and 1321:Bought deal 1252:Senior debt 1073:16 December 594:Fixed Costs 261:liabilities 241:investments 235:Definitions 231:companies. 94:Hedge funds 1807:Categories 1754:Tax shield 1714:Mismarking 1518:Stock swap 1468:Pitch book 1438:Divestment 1316:Bookrunner 1237:Pari passu 837:References 768:Total Debt 699:Fixed Cost 353:volatility 229:technology 201:bankruptcy 108:See also: 82:fixed cost 37:investment 35:to buy an 1729:Pure play 1622:Valuation 1488:Sell side 1351:Greenshoe 717:− 695:− 687:− 672:− 614:− 562:× 518:− 273:Basel III 25:leverage, 1560:Leverage 1538:Takeover 1433:Demerger 1418:Buy side 800:See also 341:Notional 166:repo 105 56:for the 29:gearing, 1543:Reverse 1528:Synergy 1368:Pre-IPO 1356:Reverse 1277:Warrant 1164:2307939 855:(1995). 713:Revenue 683:Revenue 668:Revenue 267:Banking 128:Basel I 104:History 86:revenue 73:futures 69:options 21:finance 1162:  1027:  271:Under 257:assets 205:margin 193:, and 80:using 77:Equity 1267:Stock 277:banks 98:short 44:lever 1813:Debt 1204:and 1160:SSRN 1075:2012 1025:ISBN 243:and 185:Risk 152:The 71:and 58:loan 49:risk 1150:doi 566:DFL 558:DOL 263:. 39:. 19:In 1809:: 1158:. 1146:50 1144:. 1140:. 1039:^ 990:^ 972:^ 947:^ 922:^ 910:^ 844:^ 275:, 92:. 60:. 23:, 1194:e 1187:t 1180:v 1166:. 1152:: 1077:. 1033:. 763:= 706:= 661:= 610:T 607:I 604:B 601:E 590:+ 586:T 583:I 580:B 577:E 570:= 554:= 514:T 511:I 508:B 505:E 499:T 496:I 493:B 490:E 484:= 453:T 450:I 447:B 444:E 439:s 436:t 433:s 430:o 427:C 423:d 420:e 417:x 414:i 411:F 407:+ 403:T 400:I 397:B 394:E 388:= 315:.

Index

finance
borrowing funds
investment
lever
risk
collateral security
loan
options
futures
Equity
fixed cost
revenue
operating profit
Hedge funds
short
Financial risk management § Banking
reserve requirement
capital requirement
Basel I
financial crisis of 2007–2009
financial crisis of 2007–2008
Lehman Brothers
Anton R. Valukas
repo 105
Ernst & Young
off-balance sheet
structured investment vehicles
Derivative (finance) § Leverage
Financial risk management § Banking
bankruptcy

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