underleveraged


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Underleveraged

Describing a company with too little debt. While it sounds strange, a company may be underleveraged because interest on bonds are usually tax deductible for the issuing company; thus, a bond issue can create higher earnings per share for stockholders. There is no metric for determining when a company is underleveraged and investors decide on it based on their personal perceptions.

underleveraged

Of, relating to, or being a firm that has insufficient debt in its capital structure. Because bond interest is deductible for tax purposes and is generally fixed in amount for a long period of time, some use of debt can often result in greater earnings per share for stockholders. Determining whether a company is underleveraged is usually a matter of opinion.
References in periodicals archive ?
It is unclear whether the increase in leverage for underleveraged firms comes from changes in debt or equity.
As previously mentioned, large companies are prone to significant changes in capital structure, especially in process of corporate restructuring These adjustments in capital suggest that the sample consists of companies which are underleveraged or overleveraged (Hovakimian et al.
UNB shares have risen a stellar 17 per cent in the past three months but the bank has an underleveraged balance sheet, significant potential for accelerated loan growth, cost restructuring and a higher dividend payout.
This can include briefing the board and management on future workforce or talent trends, regulatory, and geopolitical risks, underleveraged market opportunities, and new solutions to previously unsolved human capital challenges.
It is now entirely possible that MLP's with "fortress", underleveraged balance sheets will accelerate growth via takeover bids, as the interest rate cost of project finance is still benign.
A net 34 % of respondents say that corporate balance sheets are underleveraged, down from a net 40 % last month.
Corporate America has a lot of cash flow, and many companies have underleveraged balance sheets.
Design remains one of the most underleveraged assets a company has in launching and maintaining a successful brand," says Waked Al-Atraqchi, president and CEO of-Affinnova.
Cinemax has been completely underleveraged, said Shelley Wright Brindle, HBO's executive VP of domestic network distribution.
This article will look at current best practices in collaboration (across value drivers beyond disruption risk management)--a field that is undervalued and generally underleveraged.
He added: "Relatively cheap aircraft financing costs will continue to support earnings before income and tax, net margins and return on equity, as the business remains underleveraged and highly liquid.
The very qualities that make Latinas wonderful comadres can also be our downfall as the increasing opportunities to excel and prosper are mismanaged or underleveraged.