Whois & Analysis for capital-structure.com

Distressed securities are securities over companies or government entities that are experiencing financial or operational distress, default, or are under bankruptcy.

As far as debt securities, this is called distressed debt.

Purchasing or holding such distressed-debt creates significant risk due to the possibility that bankruptcy may render such securities worthless (zero recovery).

A leveraged buyout (LBO) is a financial transaction in which a company is purchased with a combination of equity and debt, such that the company's cash flow is the collateral used to secure and repay the borrowed money.

The use of debt, which has a lower cost of capital than equity, serves to reduce the overall cost of financing the acquisition.

This reduced cost of financing allows greater gains to accrue to the equity, and, as a result, the debt serves as a lever to increase the returns to the equity.

A market is one of the many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange.

While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labor) in exchange for money from buyers.

It can be said that a market is the process by which the prices of goods and services are established.

Markets facilitate trade and enable the distribution and allocation of resources in a society.

Markets allow any trade-able item to be evaluated and priced.

A market emerges more or less spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of rights (cf.

ownership) of services and goods.

Markets generally supplant gift economies and are often held in place through rules and customs, such as a booth fee, competitive pricing, source of goods for sale (local produce or stock registration), and the threat of military or police force if these rules are broken.

In finance, particularly corporate finance capital structure is the way a corporation finances its assets through some combination of equity, debt, or hybrid securities.