Some of the industries that would use lease financing for assets would be the medical industry, IT industry, farming industry and construction. Tax advantages will exist for companies that would apply such leasing. Furthermore, there will also be asset advantages when using leased medical equipment, especially with respect to insurance.
The rationale behind Qantas leasing its aircraft fleet would be to make maximum use of its assets, as asset depreciation would happen over time whether they are used or not. Therefore, lasing them out and then using it as alternative financing would be a more rational way to increase cash flow. However, perceived risks are the money arrangements for insurance and others. Economic shocks can disturb some of its leasing activities as well.
Qantas might make use of one form of leasing over another because of how it would consider aircraft assets as having a strong secondary market. By leasing out in the form of operating leases, the company would be able to have a much more stronger advantage in the secondary market.
Case 09 Olympics Options Strategies
Trading strategies using shares could have been purchased either in The Australian building material supplier Boral Ltd or its associate development companies or clients. This would be the case if it was known beforehand that Sydney would win the rights to host the 2000 games.
In such a case, a long straddle strategy would be used. A call and a put option would be bought, and this will ensure that investor will benefit despite price fall or rise.
Questions (Case 10 Capital Structures)
Most businesses choose a mix of debt and equity in order to finance their operations, however, banking firms are a special case here, as they are affected by number of conditions that will not affect normal businesses. Hence, banks like Bendigo have to plan for financing requirements and capital structures that are significantly different.
When convertible notes are used for obtaining shares, then note holders would likely determine the price value when they consider conversion. The conversion of a substantial proportion of notes would affect the capital structure.