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Chapter 9 Mature companies

Corporate Financial Strategy 4th edition Dr Ruth Bender. Chapter 9 Mature companies. Mature companies: contents. Learning objectives Financial strategy for a mature company Characteristics of project finance Simplified project finance structure Comparing project finance to a start-up.

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Chapter 9 Mature companies

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  1. Corporate Financial Strategy4th edition Dr Ruth Bender Chapter 9Mature companies

  2. Mature companies: contents • Learning objectives • Financial strategy for a mature company • Characteristics of project finance • Simplified project finance structure • Comparing project finance to a start-up

  3. Learning objectives • Explain how the life cycle model relates to a company in the mature stage of its life. • Critique the financial strategy adopted by a mature company, making a decision as to which aspects of the life cycle model are relevant to its circumstances, and why. • Appreciate the theoretical impact on the share price of changing dividend payout ratios. • Understand how project finance works, and why projects are mainly debt-financed.

  4. Financial strategy for a mature company

  5. Characteristics of project finance • Single purpose asset • Corporate sponsor • Clearly separable, in terms of costs/revenues, and legally • Debt finance, non-recourse

  6. Simplified project finance structure Regulator / Government / Concession authority All relationships covered by contracts and guarantees Project Sponsors (equity) Project Company Purchaser(s) of output Lenders Plant constructor Plant operator Suppliers

  7. Comparing project finance to a start-up

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