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Complete samenvatting financing mature firms
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This summary fully summarizes Mike Mariathasan's lessons from the financing mature firms section of business finance
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Introduction to Financing Mature Firms• Characteristics of Mature Firms:
• Revenue growth aligns with the economy’s growth rate.
• Established margins and competitive advantages are crucial.
• Increased debt capacity and cash accumulation, often leading to
inorganic growth through acquisitions.
• Distinct from entrepreneurial ventures as the need for external financing
decreases relative to firm value, with debt playing a significant role.
Capital Structure in Imperfect Markets
• Bankruptcy and Distress Costs:
• Firms incur costs to avoid formal bankruptcy and may forgo positive
NPV projects.
• Distress costs can deter customers and suppliers, making equity
financing more favorable than debt.
• The Tradeoff Theory:
• Firms balance debt's tax benefits against distress costs to maximize
claim value.
• Capital structure impacts future cash flows, owner/manager incentives,
and corporate decisions.
• Agency Conflicts:
• Debt can have positive effects by forcing managers to distribute cash to
owners.
• High debt levels reduce free cash flow, restrain managerial empire-
building, theft, and stakeholder holdup power.
• However, high leverage can lead to bondholder expropriation, risk-
shifting, and underinvestment problems.
Pecking Order Theory and Agency Costs
• Adverse Selection:
• Inside information and agency costs influence financing choices, often
leading to a pecking order where firms prefer debt over equity.
, • Remedies include ensuring "skin in the game" and verifiable
information disclosure.
Firm Size Classifications (EU and Belgium)
• EU Classification:
• SMEs employ fewer than 250 persons with a turnover not exceeding
EUR 50 million.
• Small enterprises have fewer than 50 employees and a turnover under
EUR 10 million.
• Microenterprises employ fewer than 10 persons with a turnover under
EUR 2 million.
• Belgium Classification:
• Small companies exceed no more than one of the following: 50 FTE
workforce, EUR 9,000,000 turnover, or EUR 4,500,000 balance sheet
total.
• Micro companies exceed no more than one of the following: 10 FTE
workforce, EUR 700,000 turnover, or EUR 350,000 balance sheet total.
• SMEs' Importance in the EU:
• SMEs represent over 99% of enterprises, employ over 60% of the
workforce, and generate more than 50% of value added.
Examples and Case Studies
• Underinvestment Example:
• Demonstrates how excessive debt can prevent firms from investing in
positive NPV projects due to the negative impact on shareholder value.
• Risk Shifting Example:
• Illustrates how managers might engage in riskier projects to benefit
equity holders at the expense of creditors.
These sections provide a comprehensive overview of the financial strategies and
challenges faced by mature firms, particularly focusing on the implications of debt
and equity financing in imperfect markets.
Samenvatting van pagina 22 tot en met 27
, Kapitalisatiestructuur in Onvolmaakte Markten
• Waarde van Kapitalisatiestructuur: Zodra we afwijken van perfecte
marktaannames, hebben keuzes in de kapitalisatiestructuur gevolgen voor de
waarde, omdat ze toekomstige kasstromen beïnvloeden.
Kosten van Financiële Stress
• Bronnen van Stresskosten:
• Bedrijven kunnen geld uitgeven om formeel faillissement te vermijden.
• Bedrijven kunnen positieve NPV-projecten (bijvoorbeeld noodzakelijk
onderhoud) mislopen.
• Klanten kunnen terughoudend worden met investeringen in producten
uit angst voor liquidatie.
• Leveranciers en klanten kunnen om betere voorwaarden vragen.
• Voorkeur voor Eigen Vermogen: Kosten van financiële stress bevoordelen
vaak eigen vermogen boven schulden als het goedkopere
financieringsinstrument, hoewel schulden bedrijven kunnen dwingen om op te
houden wanneer ze dat zouden moeten.
De Afwegingstheorie
• Balanceren van Schuld: Eigenaren van bedrijven balanceren de verwachte
belastingbesparingen van schuld tegen de toename in deadweight
stresskosten om de waarde van hun claims te maximaliseren.
• Te weinig schuld leidt tot te veel vennootschapsbelasting.
• Te veel schuld veroorzaakt te veel problemen bij tegenslag.
• Invloed op Toekomstige Kasstromen: De kapitalisatiestructuur beïnvloedt
ook de prikkels van eigenaren en managers en daarmee de
bedrijfsbeslissingen.
Agentschapsconflicten
• Positieve Operationele Effecten van Schuld: Schuld kan managers dwingen
contant geld uit te keren aan eigenaren in plaats van aan zichzelf of
belanghebbenden.
• Met meer schuld is een gegeven bedrag aan eigen vermogen meer
blootgesteld aan uitkomsten, wat operationele prikkels positief kan
beïnvloeden.
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