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Leveraged Leasing

Author

Listed:
  • Maria - Andrada GEORGESCU

    (National School of Political and Administrative Studies, Bucharest, Romania)

Abstract

If the asset is very costly, it may be convenient to arrange a leveraged lease, in which the cost of the leased asset is financed by issuing debt and equity claims against the asset and the future lease payments. If one knows the financing mix that will be used by the lessor, the rate of return on the lease payments, and the (lower) rate of return received by debt holders in the contract, then it is possible to estimate the required rate of return on equity invested in leveraged leases.

Suggested Citation

  • Maria - Andrada GEORGESCU, 2011. "Leveraged Leasing," HOLISTICA Journal of Business and Public Administration, Association Holistic Research Academic (HoRA), vol. 2(2), pages 34-41, July - De.
    • Handle: RePEc:urn:urnste:v:2:y:2011:i:2:p:34-41
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    File URL: http://holisticajournal.ro/details?pid=31
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    More about this item

    Keywords

    leasing; leverage; capital structure;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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