Page 12 - PowerPoint Presentation

THE FINANCING DECISION

Financing decision

4. Impact on the business:

• If new equity is issued this will dilute control for existing

shareholders or dilute EPS and DPS.

• JSE listing requirements (stringent listing requirements:

Compliance with IFRS and corporate governance,

expensive).

• Is debt subject to loan covenants?

• Does the debt provider require collateral / security?

• Are shareholder approvals necessary?

• Impact on cash flow? Debt has a significant impact on

the cash flow position of a company. Will there be

sufficient cash available to meet the interest and capital

repayments?

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