Essay: Company’s ability to exchange cash
Another approach to the dealing with the high debt to equity ratio would be to tender a company’s secured loan and public unsecured traded securities Robin, (2001). This should be accompanied by the company’s ability to exchange cash and stock of its unsecured convertible notes.
This complex set of transactions was used by ford in 2008 and 2009 to help them deal with the debts. Such actions should help and company that has a high debt to equity ratio to reduce the indebtedness and eliminate interest expenses. As a consequence to the transactions the company should be ready for the capital market as they capitalization increases significantly due the measures Walter and Robert, (2003).
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