Funded with 50% equity and 50% debt, what does this mean?
Appreciate if someone walk me through this, thanks
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Um...sure ok.
Simply, there are two sources of capital. The first of these is equity, or stock as you likely know it. This involves issuing a piece of ownership in the firm for cash. The second source of capital is debt. At a high level, this is just borrowing money from somebody else.
So if you're funding with 50/50, half of the funding comes from issuing equity and half of it debt.
THANKS, follow up question, if say, A acquires B, and the acquisition is funded half equity half debt, who is the one that issues equity and borrows money??
A borrows, then buy B's ownership? B borrows, then A uses the proceed to buy B? (sounds weird)
A is both issuing stock and borrowing money. It then combines the cash proceeds from both sources to make a purchase of B.
Right. So A is doing both. When someone issues debt, they receive the money upfront and then pay interest on it before paying it back at the end of the holding period. So if A acquires B with a 50/50 equity/debt financing structure. A issues debt equal to 50% of the purchase price, and issues an amount of equal in value to 50% of the purchase price.
I'd recommend buying a basic accounting textbook, a basic finance textbook, and some banking guides if you'd like further guidance.
Dude...are you serious? This has to be a joke...this is like 6th grade stuff you're asking...
LOL
he wants to be a big swinging D
Is this real life?
Seems like you are starting new in the industry. I would go look at Wall Street Oasis's Technical Interviewing Guide.
WSO Daycare is back baby!
Non-existent relationship advice and GS TMT PE STOX!!!
Relax guys he's prob just a big law associate. OP, is Google.com down for you also?
I'd like one stock pls
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