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Leveraged Company

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Leveraged company
A company that has debt in its capital structure.

Leveraged Company
A company that uses any debt to help finance its operations. Most companies are leveraged to some degree, but others take on so much debt they have difficulty servicing it and may file for bankruptcy. Highly leveraged companies often have more volatile profits than other companies. Some analysts, however, dispute the idea that leverage (or the lack of it) affects a company's performance in any way. See also: Capital Structure, Capital Structure Irrelevance Principle.

leveraged company
A company that uses borrowed money to help finance its assets. Leveraged companies often have more volatile earnings than firms that rely solely on equity financing. This volatility is offset, however, by the possibility of a higher return to stockholders if the firm is able to earn more on its assets than the cost of the money used to finance those assets.


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Putnam said that the leveraged company funds' investment processes rely on fundamental research by analysing corporate balance sheets and capital structures to identify the securities with the greatest total return potential.
This means that previous experience in a leveraged company may be preferred.
A leveraged company is no longer playing to the constituency of analysts, institutional investors, or stockholders - and this frees management to produce cash flow to meet the capital requirements of its core business as well as its debt service.
 
 
 
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