the table on Impact of Country Specific factors on capital structure… some are intuitive…others aren’t… any thoughts? SS8, Reading 32
Taxes and WC = Nominal is best Everything else real.
hahaha…pinkman… do you have any idea of what I’m referring to… I think you misunderstood… I’m referring to the use of debt and the length of maturity based on institutional, financial and economic factors etc… i.e. Strong Legal System - Lower Debt and Longer maturity were you referring to emerging markets valuations??!
Hahaha mumukada i had to re read your posting. I have placed in a table however, i have not memorized it yet. i posted - financial statement derivatives do you have some time to look into it please? Thank you
I think that I remember look at all the factors through a risk lens. I haven’t looked at this in awhile, so I could be off, but I think EM firms use less debt overall and more short-term debt while a US firm maybe more apt to go with more and long term. From an investors standpoint this makes sense as you are more comfortable with the information you are basing your investment on from the US firm. There is a bigger chance of the EM firm going bankrupt and you don’t have good info, so you want less risk. More leverage = higher risk to investor. I would have to go back and look to see if this example holds for all factors. Or better yet let me know since you are looking at it! Hope this helps.