- What is Dividend Recapitalization ? How does it affect the equity level in a company ? 2. How does Managed Futures standard deviation compare with equities and bonds ? What is the correlation of Managed Futures to equities and bonds ?
- According to some other poster, that is evil and greed.
Basically that is way for investor to get back some of their initial investment into a distress company after it got bought via high leverage. On the book, such action reduce equity level. 2. Low correlation.
ws – i think i remember from another post that you passed L3 last year. why are you still answering questions on here?
…to torture us. He is flogging us with his charter.
No, I truely enjoy this forum because I have to say this forum was a major contribution factor. I am sorry if such action reflected otherwise.
mike0021 Wrote: ------------------------------------------------------- > ws – i think i remember from another post that > you passed L3 last year. why are you still > answering questions on here? He’s taking it again for the fun of it, duh. That’s one of the perks of the charter…chartermembers can take any exam any time without paying any extra money. Pretty cool.
^haahhhaa, althought work load is light now, however I don’t have THAT much free time
GetSetGo Wrote: ------------------------------------------------------- > 1. What is Dividend Recapitalization ? How does it > affect the equity level in a company ? issuing new debt to pay special dividends. increases leverage. > 2. How does Managed Futures standard deviation > compare with equities and bonds ? Meaningless question in my opinion. CTAs define their own level of target volatility. >What is the > correlation of Managed Futures to equities and > bonds ? equities: negative during bearish markets, slightly positive during bulling markets bonds: small positive correlation
ws Wrote: ------------------------------------------------------- > 1. According to some other poster, that is evil > and greed. Basically that is way for investor > to get back some of their initial investment into > a distress company after it got bought via high > leverage. On the book, such action reduce equity > level. > > 2. Low correlation. Just a further point - the special dividend payout (which reduces shareholders’ fund and possibly improved ROE%) is practically funded by borrowings which effectively reduces the credit rating of the Company. But the size of the payout may not be limited by the size of the loan secured.
ws Wrote: ------------------------------------------------------- > No, I truely enjoy this forum because I have to > say this forum was a major contribution factor. I > am sorry if such action reflected otherwise. Hey ws I was just joking with you. I really appreciate your contributions. I need all the help I can get.
^
Didnt DF do a leveraged divident recap and paid out like $15/shr…i think it was DF…like in '06 maybe ??
Do we need to know those correlation relationships? It’s on Schweser notes, though. I can only keep them in one week…
- Dividend recapitalization is done by privately held companies, in which they borrow funds to pay huge dividends to the owners of the private equity. This provides partial or full return on initial investment but this only leads to an increase in the leverage of the company. 2. Managed futures generally have a lower standard deviation than equities and bonds because their strategies involve taking advantage of trending markets. This strategy leads to a low correlation between them and bonds/equities.