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Lockheed announced last December that it had retained Lazard Freres & Co. to assist it in strengthening its equity base, including a possible merger.
The firm has also reduced its leverage ratio, or the amount of money it borrows relative to its equity base, to 27 times from 32 times during the previous quarter.
Since then, the Church commissioners have been on a merry-go-round, trying to thread more money out of its equity base.
After posting its first annual loss last year, ABB intends to shed the unit to reduce debt and improve its equity base.
That gives the Polish market a predictable expansion of its equity base, encouraging other investors to come in too.Hungary reformed its pension system in 1998, but its pension funds are growing only slowly in a thin equity market.
Morgan shrank its assets another 5percentt in the quarter and its leverage ratio, a crucial gauge of financial health, was lowered to 25 times, down from 32 last summer, as Morgan raised cash and built up its equity base.
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Such an erosion can be devastating for any investment bank, especially one like Bear Stearns, which has a leverage ratio of over 30 to 1, meaning it borrows more than 30 times the value of its $11 billion equity base.
Its paltry equity base makes that look almost impossible.
With such large leverage, if just one out of every thirty loans goes bad, the bank ends up burning through its entire equity base and faces insolvency.
It would have no equity base, and therefore would be unable to offer the share options that attract good managers.
This system argues that team members accede to favor equality-based reward over equity base one (Bamberger & Levi, 2009).
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