unit2 socializing课件.pptVIP

Unit 2 Socializing;I. Warm-up;;;II. Background Knowledge;Dine somebody;III. Notes;;2. leverage Ability to influence a system, or an environment, in a way that multiplies the outcome of ones efforts without a corresponding increase in the consumption of resources. In other words, leverage is an advantageous-condition of having a relatively small amount of cost yield a relatively high level of returns. Thus, doing a lot with a little. See also financial leverage and operating leverage. ;In finance, leverage is a general term for any technique to multiply gains and losses. Common ways to attain leverage are borrowing money, buying fixed assets and using derivatives. Important examples are: A. A public corporation may leverage its equity by borrowing money. The more it borrows, the less equity capital it needs, so any profits or losses are shared among a smaller base and are proportionately larger as a result. B. A business entity can leverage its revenue by buying fixed assets. This will increase the proportion of fixed, as opposed to variable, costs, meaning that a change in revenue will result in a larger change in operating income. C. Hedge funds often leverage their assets by using derivatives. A fund might get any gains or losses on $20 million worth of crude oil by posting $1 million of cash as margin.;3. leveraged buyout A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when an investor, typically financial sponsor, acquires a controlling interest in a companys equity and where a significant percentage of the purchase price is financed through leverage (borrowing). The assets of the acquired company are used as collateral for the borrowed capital, sometimes with assets of the acquiring company. Typically, leveraged buyout uses a combination of various debt instruments from bank and debt capital markets. The bonds or other paper issued for leveraged buyouts are commonly considered not t