PhaseBio Pharmaceuticals 717265AM4 Bond
| PHASQDelisted Stock | USD 0.0003 0.0001 25.00% |
PhaseBio Pharmaceuticals' financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. PhaseBio Pharmaceuticals' financial risk is the risk to PhaseBio Pharmaceuticals stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
PhaseBio |
Given the importance of PhaseBio Pharmaceuticals' capital structure, the first step in the capital decision process is for the management of PhaseBio Pharmaceuticals to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of PhaseBio Pharmaceuticals to issue bonds at a reasonable cost.
| Popular Name | PhaseBio Pharmaceuticals US717265AM45 |
| Equity ISIN Code | US7172241090 |
| Bond Issue ISIN Code | US717265AM45 |
PhaseBio Pharmaceuticals Outstanding Bond Obligations
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| US717265AM45 | US717265AM45 | Details | |
| FCX 7125 01 NOV 27 | US717265AJ16 | Details | |
| US717265AL61 | US717265AL61 | Details | |
| BNP Paribas FRN | USF1R15XK367 | Details | |
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Understaning PhaseBio Pharmaceuticals Use of Financial Leverage
PhaseBio Pharmaceuticals' financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to PhaseBio Pharmaceuticals' current equity. If creditors own a majority of PhaseBio Pharmaceuticals' assets, the company is considered highly leveraged. Understanding the composition and structure of PhaseBio Pharmaceuticals' outstanding bonds gives an idea of how risky it is and if it is worth investing in.
PhaseBio Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of novel for cardiovascular diseases. On October 23, 2022, PhaseBio Pharmaceuticals, Inc. filed a voluntary petition for reorganization under Chapter 11 in the U.S. Phasebio Pharmaceuticals operates under Biotechnology classification in the United States and is traded on OTC Exchange. It employs 60 people. Please read more on our technical analysis page.
Pair Trading with PhaseBio Pharmaceuticals
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if PhaseBio Pharmaceuticals position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PhaseBio Pharmaceuticals will appreciate offsetting losses from the drop in the long position's value.The ability to find closely correlated positions to PhaseBio Pharmaceuticals could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace PhaseBio Pharmaceuticals when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back PhaseBio Pharmaceuticals - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling PhaseBio Pharmaceuticals to buy it.
The correlation of PhaseBio Pharmaceuticals is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as PhaseBio Pharmaceuticals moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if PhaseBio Pharmaceuticals moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for PhaseBio Pharmaceuticals can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out Your Equity Center to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in state. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Consideration for investing in PhaseBio Pink Sheet
If you are still planning to invest in PhaseBio Pharmaceuticals check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the PhaseBio Pharmaceuticals' history and understand the potential risks before investing.
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What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.