What does existing financing mean

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The sentence contains offensive content. Cancel Submit. Your feedback will be reviewed. By taking a weighted average in this way, one can determine how much interest a company owes for each dollar it finances. Firms will decide the appropriate mix of debt and equity financing by optimizing the WACC of each type of capital while taking into account the risk of default or bankruptcy on one side and the amount of ownership owners are willing to give up on the other.

Because interest on the debt is typically tax deductible, and because the interest rates associated with debt is typically cheaper than the rate of return expected for equity, debt is usually preferred. However, as more debt is accumulated, the credit risk associated with that debt also increases and so equity must be added to the mix.

Investors also often demand equity stakes in order to capture future profitability and growth that debt instruments do not provide. WACC is computed by the formula:. Provided a company is expected to perform well, you can usually obtain debt financing at a lower effective cost. Financial Ratios. Business Essentials. Tools for Fundamental Analysis. Financial Analysis. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.

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What are the documents required for working capital loan? How do you finance working capital? What is Equipment Financing? Examples of Existing Financing Arrangements in a sentence The Purchaser also intends to make use of external banking facilities made available to the Purchaser to refinance all or part of the Existing Financing Arrangements.

Existing Financing Arrangements means financing arrangements of the Borrower or any Subsidiary other than the transactions under the Loan Documents and the Permitted Receivables Transactions and the Equipment Financing Transactions in effect on the Closing Date. Existing Financing Arrangements shall have the meaning set forth in the Preliminary Statements hereto.

Existing Financing Arrangements shall have the meaning set forth in the Recitals herein. Existing Financing Arrangements. KG was converted into the Issuer in The Existing Financing Arrangement are being fully repaid and terminated in connection with the Refinancing. Financing Arrangements means the arrangements between the Borrower and the State as per current policy of the Borrower, and acceptable to ADB;. Existing Financing has the meaning set forth in the second recital to the Note Purchase Agreement.