Sculptor Acquisition Corp 552953CD1 Bond
SCUADelisted Stock | USD 10.55 0.00 0.00% |
Sculptor Acquisition's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Sculptor Acquisition's financial risk is the risk to Sculptor Acquisition stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Sculptor |
Given the importance of Sculptor Acquisition's capital structure, the first step in the capital decision process is for the management of Sculptor Acquisition to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Sculptor Acquisition Corp to issue bonds at a reasonable cost.
Popular Name | Sculptor Acquisition MGM Resorts International |
Equity ISIN Code | KYG7T9831035 |
Bond Issue ISIN Code | US552953CD18 |
S&P Rating | Others |
Maturity Date | 1st of September 2026 |
Issuance Date | 19th of August 2016 |
Coupon | 4.625 % |
Sculptor Acquisition Corp Outstanding Bond Obligations
Dana 575 percent | US235822AB96 | Details | |
Boeing Co 2196 | US097023DG73 | Details | |
International Game Technology | US460599AD57 | Details | |
BNP Paribas FRN | USF1R15XK367 | Details | |
MGM Resorts International | US552953CD18 | Details | |
AerCap Global Aviation | US00773HAA59 | Details |
Understaning Sculptor Acquisition Use of Financial Leverage
Sculptor Acquisition's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Sculptor Acquisition's total debt position, including all outstanding debt obligations, and compares it with Sculptor Acquisition's equity. Financial leverage can amplify the potential profits to Sculptor Acquisition's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Sculptor Acquisition is unable to cover its debt costs.
Sculptor Acquisition Corp I does not have significant operations. Sculptor Acquisition Corp I was incorporated in 2021 and is based in New York, New York. Sculptor Acquisition is traded on New York Stock Exchange in the United States. Please read more on our technical analysis page.
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Other Consideration for investing in Sculptor Stock
If you are still planning to invest in Sculptor Acquisition Corp 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 Sculptor Acquisition'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.