Prospector Capital Debt
| PRSRDelisted Stock | USD 10.53 0.00 0.00% |
Prospector Capital's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Prospector Capital's financial risk is the risk to Prospector Capital stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Given that Prospector Capital's debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Prospector Capital is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Prospector Capital to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Prospector Capital is said to be less leveraged. If creditors hold a majority of Prospector Capital's assets, the Company is said to be highly leveraged.
Prospector |
Prospector Capital Corp Debt to Cash Allocation
Many companies such as Prospector Capital, eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
Prospector Capital Corp currently holds 157 K in liabilities. Prospector Capital Corp has a current ratio of 0.53, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Note, when we think about Prospector Capital's use of debt, we should always consider it together with its cash and equity.Prospector Capital Assets Financed by Debt
Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Prospector Capital's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Prospector Capital, which in turn will lower the firm's financial flexibility.Prospector Capital Corporate Bonds Issued
Understaning Prospector Capital Use of Financial Leverage
Prospector Capital's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Prospector Capital's current equity. If creditors own a majority of Prospector Capital's assets, the company is considered highly leveraged. Understanding the composition and structure of Prospector Capital's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Prospector Capital Corp. does not have significant operations. The company was incorporated in 2020 and is based in La Jolla, California. Prospector Capital is traded on NASDAQ Exchange in the United States. Please read more on our technical analysis page.
Pair Trading with Prospector Capital
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Prospector Capital position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Prospector Capital will appreciate offsetting losses from the drop in the long position's value.Moving together with Prospector Stock
Moving against Prospector Stock
| 0.8 | MRK | Merck Company Fiscal Year End 6th of February 2025 | PairCorr |
| 0.79 | BKRKF | PT Bank Rakyat | PairCorr |
| 0.75 | BA | Boeing Fiscal Year End 29th of January 2025 | PairCorr |
| 0.74 | BKRKY | Bank Rakyat | PairCorr |
| 0.71 | PPERF | Bank Mandiri Persero | PairCorr |
The ability to find closely correlated positions to Prospector Capital could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Prospector Capital when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Prospector Capital - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Prospector Capital Corp to buy it.
The correlation of Prospector Capital is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Prospector Capital moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Prospector Capital Corp moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Prospector Capital can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out Your Equity Center to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in state. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Consideration for investing in Prospector Stock
If you are still planning to invest in Prospector Capital Corp check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the Prospector Capital's history and understand the potential risks before investing.
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What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.