Levered: Difference between revisions
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''Levered is also sometimes known as 'leveraged' or 'geared'.'' | ''Levered is also sometimes known as 'leveraged' or 'geared'.'' | ||
5. | |||
When quantified, the ratio of Debt / Equity in a company's capital structure. | |||
:<span style="color:#4B0082">'''''Maximum borrowing ceilings likely to be lower'''''</span> | |||
:"PwC adds that the ceiling on how much businesses can borrow is likely to be lower because of the increased cost of debt and more prudent appetite from lenders. | |||
:For example, a company that could previously achieve a five-times levered arrangement may now be looking at three-four times." | |||
:''Refinancing costs rocket - Philip Smith - The Treasurer - Issue 2, 2024, p21.'' | |||
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[http://www.treasurers.org/node/8012 Masterclass: Measuring financial risk, Will Spinney, The Treasurer] | [http://www.treasurers.org/node/8012 Masterclass: Measuring financial risk, Will Spinney, The Treasurer] | ||
[[Category:Corporate_finance]] | |||
[[Category:The_business_context]] | [[Category:The_business_context]] | ||
Revision as of 19:38, 11 May 2024
1. Capital asset pricing model (CAPM).
In the CAPM, a levered beta is a beta which takes account of the additional risks of debt finance.
2.
Levered cash flow is the cash flow taking account of debt.
3.
A levered company or business is one that is financed in part by debt.
4.
The term 'levered' may also be used to mean having a high level of debt, in any of these contexts.
Levered is also sometimes known as 'leveraged' or 'geared'.
5.
When quantified, the ratio of Debt / Equity in a company's capital structure.
- Maximum borrowing ceilings likely to be lower
- "PwC adds that the ceiling on how much businesses can borrow is likely to be lower because of the increased cost of debt and more prudent appetite from lenders.
- For example, a company that could previously achieve a five-times levered arrangement may now be looking at three-four times."
- Refinancing costs rocket - Philip Smith - The Treasurer - Issue 2, 2024, p21.
See also
- Balance sheet ratio
- Beta
- Capital asset pricing model
- Geared beta
- Geared cash flow
- Gearing
- Guide to risk management
- Ungeared
- Ungeared cash flow
Other resource
Masterclass: Measuring financial risk, Will Spinney, The Treasurer
