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That left investors wondering what percentage of the Deutsche Telekom purchase would be in equity and what percentage would be cash.
Assuming the current rules of the private equity market hold, at least a third of the purchase price, or $3 billion, would need to be in equity.
This cushion, which could be in equity or in bonds, should amount to 15 percent to 20 percent of their "risk-weighted" assets, roughly double the equity-only cushion that new regulations demand.
"Of course what they were doing was just pushing the boundaries".The new rules on capital, known as Basel 3, try to deal with both these points by forcing banks to hold a lot more capital and by requiring much of it to be in equity.
The second concern would probably be in equity for the "founder" of the idea.
"And these market movements may not be necessarily reflective of the underlying value of that real asset whether it be a commodity or whether it be in equity.
Similar(54)
Investors should take some comfort in that, given that they are supposed to be in equities for the long term.
Should we be in equities?
I like long-short funds if you feel like you've got to be in equities.
For readers who don't need to be in equities, my advice is: Use rebounds from the U.S. Federal Reserve Board's coming interest-rate cuts to sell stocks.
The yield will be in equities, in our opinion, in the next year, two years, or however long that the policy remains the way it is.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com