Why are syndicated loans especially useful for financing takeovers?
Answer to relevant QuestionsHow do project finance loans differ from other types of syndicated loans? What is a debenture? Why do you think that this is the most common form of corporate bond in the United States, but is much less commonly used elsewhere? How do Miller and Modigliani (M&M) arrive at their conclusion that dividend policy is irrelevant in a world of frictionless capital markets? Why is the assumption of fixed investment policy crucial to this conclusion? How do average dividend payout ratios for companies headquartered in English common- law countries compare with those of companies head-quartered in civil law countries? What explains this difference? A company decides to compete by making a major investment to modernize production facilities. Describe two ways in which meeting this objective might force a firm to sacrifice other objectives.
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