Eaton Vance New 552953CD1 Bond
Eaton Vance New holds a debt-to-equity ratio of 0.495. With a high degree of financial leverage come high-interest payments, which usually reduce Eaton Vance's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Eaton Vance's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Eaton Vance's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Eaton Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Eaton Vance's stakeholders.
For most companies, including Eaton Vance, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Eaton Vance New, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Eaton Vance's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Eaton |
Popular Name | Eaton Vance MGM Resorts International |
Equity ISIN Code | US27826W1045 |
Bond Issue ISIN Code | US552953CD18 |
S&P Rating | Others |
Maturity Date | 1st of September 2026 |
Issuance Date | 19th of August 2016 |
Coupon | 4.625 % |
Eaton Vance New Outstanding Bond Obligations
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BNP Paribas FRN | USF1R15XK367 | Details | |
EATON VANCE P | US278265AE30 | Details | |
MGM Resorts International | US552953CD18 | Details | |
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Other Consideration for investing in Eaton Stock
If you are still planning to invest in Eaton Vance New check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the Eaton Vance's history and understand the potential risks before investing.
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What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.