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Debt to equity ratio |
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Debt to equity ratioNet borrowings of a company divided by shareholders' funds. The ratio shows the amount of financing that is provided by sources other than the shareholders.Net borrowings means the total borrowings of the company from banks, other financial institutions, debenture holders and preference shareholders, less any cash that is readily available and any short term cash holdings.Both figures can be found in a company's balance sheet. The ratio is often multiplied by 100 and expressed as a percentage. The higher the percentage, the more risky for lenders to the company. Most lenders like the percentage to be below 50%. If it is above 100%, the company is said to be highly geared.Similar MatchesNegative equityNegative equityA situation where the purchaser of a property has taken out a mortgage and some time after the purchase, the value of the property falls below the mortgage amount. For example:Purchase price of property: £80,000Deposit: £10,000Mortgage: £70,000If the value of the property falls below £70,000, the mortgage holder has negative equity in the property. Debt for equity swapDebt for equity swapA swap agreement to exchange equit../../finance-glossary/returns for debt returns or the converse over a prearranged length of time. Growing Equity Mortgage (gem)Growing Equity Mortgage (gem)A fixed rate, graduated payment loan allowing low beginning payments and a shorter term because of higher payments as the loan progress. Based on the theory of increasing income by the buyer and, therefore. ability to make higher future payments. When state law applies, usury laws in some states may not presently allow such loans when less than interest only payments create interest on interest. Sweat EquitySweat EquityA program which allows a purchaser to do work on the property in place of all or part of the down payment and other costs of purchase. Top down equity management styleTop down equity management styleInvestment style that begins with an assessment of the overall economic environment and makes a general asset allocation decision regarding various sectors of the financial markets and various industries. The asset allocation decision, in contrast, selects specific securities within the particular sectors. Further SuggestionsGEM (growing equity mortgage)Leveraged equity Equity linked policies Owners equity All equity rate equity release scheme equity risk premium equity Dual syndicate equity offering Salomon Brothers World Equity Index (SBWEI) Equity Return on equity (ROE) Sweat equity Carrot equity World Equity Benchmark Series (WEBS) Appel Loan (Accelerating Payoff Progressive Equity Loan) equity options personal equity plan Foreign equity market Prices (of equity) Equity Stockholder equity Cost of equity Stratified equity indexing high equity |
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