For instance, if the company looks to raise capital in debt or equity markets in the future, the new structure would allow investors to derive different growth and cost of capital assumptions leading to a higher combined valuation.

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Comparing terms is often a complicated analysis and the practical cost-of-capital of a given debt term sheet is sometimes hard to calculate.

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Something has to give as the debt market tightens, Kravis added, and as the cost of capital goes up, multiples come down.

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And if banks are already paying over the odds for capital and debt, which they are, that must push up the cost and limit the availability of finance for households and businesses.

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Even a slightly lower cost of capital is important for a business that carries a lot of debt.

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If a buyback raises the debt-to-equity ratio, it can lower the firm's overall cost of capital (because in most countries interest payments, unlike dividends, are tax deductible).

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These statements are likely to address matters such as the company's future financial condition and performance (including earnings per share, profitability, liquidity, cash flows, debt levels, market share growth and other sales information, inventory levels and capital expenditures), its cost reduction initiatives and plans for store closings, and the expansion of product categories, including eBook content and eReaders.

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High debt levels typically make a business unattractive for an acquisition as potential buyers have difficulty raising additional debt against the business, and the associated volatility related to the future cash flows also raises the cost of capital for acquisition.

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