Essays on Mezzanine

1. Corporate Governance refers to the mechanism or system in which enterprises are directed and controlled, especially in which the interests of stakeholders are balanced. It is also known as the relationship between various stakeholders of business such as shareholders, management, the board of directors, etc. (Tricker & Tricker, 2012). Corporate governance system varies from country to country due to the differences in the economic and political system. It can be observed in a way that American corporate governance is entirely different from that is followed in Japan and Germany. In America, corporate governance system is controlled and directed by ...

Summary of Chapter 12

Introduction Yescombe presents on Chapter 12 issues between the lenders and the Project Company related to Cash-Flow Controls, Security and Enforcement (202). The author posits that the Public Authority has to review the lenders’ documents to make sure there will be no impediments for the Project Company to carry its mandate. Control of Cash Flows: The Project Company’s cash flows is closely controlled by the lenders, as they will depend on the residual flows to receive their payments (Yescombe 202). The lenders control expenditures via the Disbursement Account, which receives the inflows from equity and loans, and is ...

BUSINESS FINANCING

Introduction Business owners and managers seeking financing encounters an essential decision regarding choice of whether to borrow money or to make use new equity capital. Given that equity and debts have very varied characteristics, each of them has different effect on cash-flow, earnings, and taxes as well as on balance sheet. They also have different impacts on any company`s dilution, leverage as well as a host for other financial metrics by which companies are measured. Lastly, each business financing options presents a different kind of relationship in relation to the financing source. Thus, a company`s plan on ...

STRATEGY ANALYSIS

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INTRODUCTION

Preferred apartment communities was found in 2009 by Silverstein Leonard A and Williams, John A. the company headquartered in Atlanta, it was started with the aim of acquiring the multifamily properties throughout the United States markets. The company operates in three segments that include finance, retail, and multifamily communities. The financing segment of the company includes the bridge loans, the investment portfolio of the firm of mezzanine loans, and other instruments that company deploy for partially financing the constructions, developments, real states and its related assets, and new multifamily communities’ prestabilization carrying a cost. The multifamily ...

Introduction

Preferred Apartments Communities operates multifamily properties throughout U.S at selected target markets (Nasdaq.com, 2016). The company segments consist of retail, real estate and multifamily communities financing. The multifamily communities consist of about 10 owned residential while the retail segment has about 10 owned retail shopping centers and the financing segment consist of bridge loans and mezzanine loans among others. As for Essex Property Trust Company, it engages in the ownership and renting of apartments in communities (Essex Property Trust Inc., 2014). The company mostly operates in metropolitan areas where demand is determined by population growth and employment growth while ...

Richards (2013, p. 1) first sets out to define the terms to gain a better understanding of the concepts. “Debt” is defined as “borrowing money from an external source with the promise to return the principal, in addition to an agreed upon rate of interest.” Though the terms here are often understood in the negative light, startups, or small companies just beginning to operate, often use debt financing to fund their operations. In fact, even companies with the most robust balance sheets will often times reflect some amount of debt within. In financing terminology, debt can also be ...

1. Capital budgeting utilizes various financial tools in evaluating investment options. Of important consideration in these decisions is the cost of capital, since it determines the returns that will accrue from the investment decision (Brealey, et al 2011) The cost of capital can be two fold, either the published interest rates by the financial institutions, or the average of all the sources of financing for the project, a method called the weighted average cost of capital. (Please see the attached excel workings for the company’s weighted average cost of capital) In determining the most appropriate cost of ...