Capital Structure - gearing and why debt finance is cheaper

Kevin concludes the topic of dividend policy. It compares two recent The Financial Times articles on the payment of dividends. The first looks at an increase in dividends at Lloyds TSB (The Financial Times 31 July 2007). The second looks at the use of innovative trading of dividends by Investment Banks (The Financial Times 11 July 2007).

Kevin introduces the topic of Dividend Policy. It examines the impact of dividends on the share price. It features a recent article on dividend payments by AIM companies (The Financial Times 4 Oct 2007).

Kevin examines the issue of financial distress. He examines this topic with the example of Eurotunnel plc

Kevin looks at the topic of capital structure. In this episode we see why debt finance is normally much cheaper for companies than the alternative of issuing equity finance. We also examine various measures of gearing.

Kevin introduces the dividend valuation model. This is the key technique used for company valuations. We see how this can be used to place a value on the shares in the Pearson Group.

Kevin talks about share valuations. This podcast considers share valuation in the light of a number of current news stories including that of Northern Rock, who's shares have peaked and troughed recently.

Kevin considers the weighted average cost of capital

Kevin considers the cost of capital

Kevin presents a brief update on Northern Rock and then continues with his discussion on the bond markets

You might have seen discussion in the papers/TV/radio of the current problems in the UK money markets. This is a great topic to cover as it relates well to a number of previous markets that Kevin has covered in this series.