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GLOSSARY

Price-to-earnings ratio definition

Published by a LexisNexis Pensions expert

What does Price-to-earnings ratio mean?

The ratio of a company's share price to the earnings per share.

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Financing an acquisition—share and asset purchases

Financing an acquisition—share and asset purchases The buyer may fund the acquisition by way of: • cash: from its internal cash resources (or those of its parent or other group company) • debt financing: raising capital from a bank loan or by issuing lenders with debt securities (including loan notes), or • equity financing: raising capital from a further offer of its equity securities, in the form of an open offer, rights issue, cash placing, cash box placing or vendor placing Debt or equity? Debt financing Raising capital for an acquisition through debt finance can broadly be split into two main types: • bank loans: various types of facility (generally either a term loan facility or revolving credit facility) provided by either a single lender (bilateral loan) or a syndicate of lenders (syndicated loan) • debt securities: financial instruments issued to create or evidence capital indebtedness, most commonly in the form of loan notes but also in many other forms (warrants, bonds etc, as summarised below) Equity...

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