Capital Structure Decision by Ebele Kemery

Capital structure decision refers to the selection of capital variety for running the business. Any business needs money for its operations. In the initial stages, it is the business owners, founders, or entrepreneurs who inject these funds. The business is liable to return these funds to these investors. The capital raised in this way is used for purchasing various assets that are essential for running the business. However, some of the assets such as the land, buildings, plant, and machinery are long lasting assets, while other assets, such as vehicles, and inventory are comparatively short term assets. In other words, the business needs money for varying duration.

Therefore, capital structure decision refers to the process of optimally combining the financing options available to a business. A business' capital structure can be broadly divided into three categories, i.e., common equity, preferred stock, and other debts. Business enterprises usually utilize debt funds for their short term requirements, and opt for long term options such as debentures, preferred stocks, and common equity when they are planning any major expansion or purchase of long lasting assets. Such long term capital options include profits retained by the business as reserves for any impending purchase or expansion. A profit making business finds it easier to raise money by offering common equity, and preferred stocks. Unlike it, a startup may have little choice but to opt for debt route. Interest rates applicable on debt depend upon prevailing market conditions and the risk associated with the business.

Ebele Kemery says that effectively, capital structure decision refers to the meticulous planning of business' funds requirement. While planning such funds requirement, decision makers consider current requirements as well as future requirements. Long term finance options such as common equity and preferred stocks may appear as a cheap way of raising money. However, if this money is raised for short term requirements, then the earnings per share or the EPS comes down. This is because average rate of earning profits on money in the business also come down due to underutilization of these funds. More debts, on the other hand, imply more business risk because debts may crystallize suddenly forcing the business into distress sale.

Consequently, capital structure decision refers to the act of balancing profitability with viability. Borrowing in the market may appear to be an expensive way of financing business activities. However, if the business can earn more profits on borrowed funds than it pays for borrowing them, then such debts are beneficial for the business. Effectively, the business earns profits on others money. This financial process of borrowing money to earn profits is called leveraging. It is a crucial part of any capital structure decision making. There are industrial norms and ratios that indicate acceptable leveraging for any business.

Therefore, capital structure decision refers to the management's ability in selecting the ideal option for raising capital for the business at any point of time. Such decisions have a direct impact on investor's wealth. If EPS comes down, the demand for the business' shares will be lower on stock markets. Consequently, the premiums on these shares will be south bound, and so will investor's wealth. Both long term and short term financing options can have this effect. Long term financing options like common equity and preferred stock may result in ineffective utilization of funds, and consequently lower EPS. Short term financing options like borrowings from banks may lower the profits and EPS due to interest costs.

Ms. Ebele Kemery is a member of the Global Fixed Income, Currency & Commodities (GFICC) Group. Based in New York, Ebele is the head of Energy Investing within the Commodities team. Prior to this role, she provided institutional client relationship management and tailored risk management solutions in the Investment Bank’s Global Commodities Group.
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Reasons to Choose Equity Investment: Ebele Kemery

Stock markets and anything related to them tend to be fearsome objects for people. This could explain the wariness of investors where equity investment is concerned. But the fact is that there are some decided advantages of putting your money into equity financing instead of letting it snooze away in a savings bank account or a fixed deposit. This is because, your money would not simply be gathering interest; it would be effectively growing with your investment. The company you have invested grows with time, and with it grows your dividend. The dividend, of course, depends on the growth of the company and the company decides how much the dividend is to be. Another thing you must consider is that the company may very well decide to give further stock to its investors. This is stock that you could either keep or sell off. As this Rights Issue is generally priced below what is the market value, you could easily acquire it for less and sell it for more.

A company might also decide to give away some of its shares for free - called the Bonus Issue - to the shareholders. But this is only when the company might have large reserves. Generally, the very announcement of a Bonus Issue can contribute to rise in share value. If you use it wisely, it could prove to be quite a profit for you. Such bonuses that the company doles out now and again could prove to be lucrative to you. The fact that your investments are highly liquid is another thing you might want to consider as a benefit, especially when you compare it to investments like real estate. Most of your investments would likely give you high returns in the long run, which is what you need to consider. You can also get your investments tailored to suit your own needs, depending on whether it is income or growth that you are looking for.

You need to understand that markets might fluctuate, but companies tend to grow - and this ensures that their share value increases over time. But that doesn't mean that you can blindly invest in any portfolio placed before you. You need to look into the background, do a thorough check of the shares and their value and make sure that it is a sound investment for you. A good deal of the time, it is shoddy research that makes investors lose money. Ebele Kemery suggests that if you're not sure, then opt for equity investment banking services. They'll guide you as to where you can invest.

For more queries you can ask Ms. Ebele Kemery, she has consistently promoted; recognized for development and leadership strengths. Strong analytical approach; full-tuition scholar from top-tier University possessing Bachelors in Engineering in Electrical Engineering
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Ebele Kemery on Building Up an Equity Portfolio for Investment

Ebele Kemery: It is not sensible to put all your money in one company. It is better to spread it over at least ten companies, which means having at least £10,000 to invest, as it is not economic to put less than, say, £1,000 in any one due to minimum dealing costs.
Consideration should also be given to share sectors. It is risky to have too much invested in one sector.

Many newspaper City pages recommend individual shares to buy or sell but this can push the price up or down before you can react. Information is also available on the Internet. Company reports can be obtained to provide more information.

There are also tip sheets, which recommend individual shares. They are expensive and one wonders whether the tipper keeps the best ideas to him.
Word of mouth can be useful and it is a good idea to watch out for new ideas and successes, such as, for example, a shop which seems to be doing well or a product which you have bought or is recommended by a magazine or TV programme.

Smaller companies
There may be a narrow market in smaller companies' shares, which can make them difficult to buy and (particularly) to sell. Also, smaller companies are more likely to go bust than are larger ones.
However, good smaller companies can be valuable investments as they tend to be cheaper than larger companies, have higher dividend yields and provide a greater potential for capital growth and dividend increase.

Fundamental analysis
This term is used to describe choosing shares by looking at the fundamentals the financial results for recent years, including statistics such as profit and dividend trends, the annual and half yearly reports, recent announcements by the company, share price history, share dealings by directors. In addition, there are the statistics for the sector in which the company's shares sits.

Technical analysis
It is possible to carry out what is called technical analysis, which can be done on a computer using a proprietary system. Graphs of the price of each share can be drawn and you can superimpose on them the relative movement of an appropriate index, short a,nd/or long term averages and stop/loss points.
There is a lot to be said for using both types of analysis rather than only one of them.

International shares
It has become easier to invest directly in shares outside the UK, following the introduction of Jiway, which is a recognised investment exchange under the jurisdiction of the Financial Services Agency. The cost to brokers is set in euros at an amount of less than £5, so their charge to you should not be astronomic.

When to buy and sell
Theoretically you should buy shares when the market starts going up and sell when it turns down but few of us can distinguish a blip from a trend. In any case, individual shares may not move with the market.
There is a great tendency to sell a share, which has fallen in price, particularly if it goes below the purchase price, and to buy more of a share that has risen. This may be the right action but decisions should be based not on the past but on expectations of the future.
Cut losses, but let profits run. However, it can be sensible to sell part of your holding of shares that are showing a good profit, leaving in, say, the equivalent of your original investment, particularly if the shares are highly volatile.

Do not churn (continual dealing) as dealing costs can mount up.
Above all, do not panic when prices fall; take the long view most big market falls (sometimes called corrections) are followed by a fairly quick recovery and what seems a catastrophe at the time later becomes only a small blip on a trend line.

Defensive stocks
Shares in some companies are recognised as defensive, which means they are worth holding in periods of uncertainty.

Examples are:
Stores - people need to live and therefore will buy clothing, food and drink;
Utilities such as electricity, gas, oil and water - likewise there have to be a continuing demand;
Transport such as bus/coach and rail (but perhaps not air) - demand for these will also hold up.

Value investing
This term describes the purchase of cheap, unpopular shares, as opposed to growth investing sectors expected to have considerable growth. Together, the two approaches are called style investing.
Suitable shares for value investing are considered to be those with high cashfiow, dividends and earnings yields, and high ratios of sales and book value to share price.
Over the very long run, value shares appear to outperform growth shares, possibly because of the greater volatility of the latter (the tortoise and hare phenomenon!)

Hedging
There are various ways of protecting your shares from an expected fall in the share price (or in the market as a whole) without actually selling them. They also have the advantage of locking in a profit but deferring a potential capital gain.
All use the techniques of 'going short' selling something you have not got, which can be very risky on its own, but because you do hold the shares the high risk is removed.

Ebele Kemery has a decade of experience in Finance, Investment Management, Sales, Trading and Commodities. She is a full-tuition scholar from The Cooper Union for the Advancement of Science and Art where she earned a Bachelors of Engineering in Electrical Engineering, with a focus in Electronics. Ms. Kemery posseses skills in Equities Portfolio Management, Hedge Funds Investments and much more...

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Ebele Kemery - Project Portfolio Management

Project portfolio management is the art of applying management skills, techniques, and tools to a group of projects with the purpose of meeting the financial goals of organizations. It usually employs a structured approach. Project portfolio management is often regarded as the next generation of project management. It is an integrated system that views business as a set of projects.

Project portfolio management has numerous benefits. It is possible to review and alter programs accordingly as situations change. The central part of project portfolio management is selection of the right project. There are mainly five levels in the project portfolio management process. The first level is to organize projects into discrete units and analyze cost and other necessary resources. The next level is to take decisions that would help achieve the goals. At the third level, metrics, tools, and models are developed and the cost of the project is estimated. The fourth level does the optimization of the project. The final level is attained when the company has made project portfolio management a core competency.

Project portfolio management allows executives to review portfolios, spot redundancies, spread resources in an appropriate manner, and adjust projects to get return as high as possible. There are three main reasons to adopt project portfolio management - its realistic nature, rationality, and visibility. Project portfolio management is based on reality and it encourages a company to build a project inventory baseline. Resources available and targets to be achieved are realistically balanced. Project portfolio management is fact-based as it allocates resources such as time, equipment, and personnel based on information available. Project portfolio management is observable too. It employs several tools to view progress made at various levels and the amount of resources used.


Ebele Kemery is a Portfolio manager - Head of Energy Investing at JPMorgan Asset Management with proven track record of robust and consistent profitable returns in commodities. Increased assets under management through strong performance and development of customized solutions that leverage a wide variety of market techniques. Consistently promoted; recognized for trading and leadership strengths. Member of the Editorial Advisory Board of the Global Commodities Applied Research Digest, and full tuition scholar from Top tier University possessing a Bachelors of Engineering in Electrical Engineering.

Ms. Ebele Kemery has a decade of experience in Finance, Investment Management, Sales, Trading and Commodities. She is a full-tuition scholar from The Cooper Union for the Advancement of Science and Art where she earned a Bachelors of Engineering in Electrical Engineering, with a focus in Electronics.


Main Skills:-

• Commodity Markets
• Oil & Gas Industry
• Trading Sales Originations
• Financial Structuring
• Relationship Management
• Petroleum Commodity Investment
• Banking FX Options
• Strategy Risk Management
• Hedging Derivatives Management
• Equities Portfolio Management
• Hedge Funds Investments

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