The Costs of Debt

As any borrower will attest, debt certaintly has disadvantages. In particular, borrowing money can expose the firm to default and eventual liquidation, increase the

□ There is evidence that increases in leverage are followed by improvements in operating efficiency, as measured by operating margins and returns on capital. Palepu (1990) presents evidence of modest improvements in operating efficiency at firms involved in leveraged buyouts. Kaplan(1989) and

□ Leveraged Recapitalization:

In a leveraged recapitalization, a firm borrows money and either buys back stock or pays a dividend, thus increasing its debt ratio substantially.

agency problems arising from the conflict between the interests of equity investors and lenders, and reduce the flexibility of the firm to take actions now or in the future.

Retirement Planning For The Golden Years

Retirement Planning For The Golden Years

If mutual funds seem boring to you, there are other higher risk investment opportunities in the form of stocks. I seriously recommend studying the market carefully and completely before making the leap into stock trading but this can be quite the short-term quick profit rush that you are looking for if you am willing to risk your retirement investment for the sake of increasing your net worth. If you do choose to invest in the stock market please take the time to learn the proper procedures, the risks, and the process before diving in. If you have a financial planner and you definitely should then he or she may prove to be an exceptional resource when it comes to the practice of 'playing' the stock market.

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