ProShares Ultra 7 74348TAW2 Bond

UST Etf  USD 42.54  0.48  1.12%   
UST Inc's 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. UST Inc's financial risk is the risk to UST Inc 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).
  
Check out the analysis of UST Inc Fundamentals Over Time.
View Bond Profile
Given the importance of UST Inc's capital structure, the first step in the capital decision process is for the management of UST Inc 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 ProShares Ultra 7 10 to issue bonds at a reasonable cost.
Popular NameUST Inc PSEC 3437 15 OCT 28
Equity ISIN CodeUS74347R1804
Bond Issue ISIN CodeUS74348TAW27
S&P Rating
Others
Maturity DateOthers
Issuance DateOthers
View All UST Inc Outstanding Bonds

ProShares Ultra 7 Outstanding Bond Obligations

Understaning UST Inc Use of Financial Leverage

UST Inc's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to UST Inc's current equity. If creditors own a majority of UST Inc's assets, the company is considered highly leveraged. Understanding the composition and structure of UST Inc's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
The fund invests in financial instruments that ProShare Advisors believes, in combination, should produce daily returns consistent with the funds investment objective. UST Inc is traded on NYSEARCA Exchange in the United States.
Please read more on our technical analysis page.

Thematic Opportunities

Explore Investment Opportunities

Build portfolios using Macroaxis predefined set of investing ideas. Many of Macroaxis investing ideas can easily outperform a given market. Ideas can also be optimized per your risk profile before portfolio origination is invoked. Macroaxis thematic optimization helps investors identify companies most likely to benefit from changes or shifts in various micro-economic or local macro-level trends. Originating optimal thematic portfolios involves aligning investors' personal views, ideas, and beliefs with their actual investments.
Explore Investing Ideas  
When determining whether ProShares Ultra 7 is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if UST Etf is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Proshares Ultra 7 10 Etf. Highlighted below are key reports to facilitate an investment decision about Proshares Ultra 7 10 Etf:
Check out the analysis of UST Inc Fundamentals Over Time.
You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
The market value of ProShares Ultra 7 is measured differently than its book value, which is the value of UST that is recorded on the company's balance sheet. Investors also form their own opinion of UST Inc's value that differs from its market value or its book value, called intrinsic value, which is UST Inc's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because UST Inc's market value can be influenced by many factors that don't directly affect UST Inc's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between UST Inc's value and its price as these two are different measures arrived at by different means. Investors typically determine if UST Inc is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, UST Inc's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

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.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.