Because it carries higher risk, it is priced above senior debt and often includes equity kickers such as warrants. It is used to bridge funding gaps in acquisitions and growth investments.
Source: Finansman uygulaması
Related terms
Leveraged buyout (LBO)The acquisition of a company financed largely with debt, which is planned to be repaid from the target's cash flows.Private equity fundAn investment fund that invests in the equity of unlisted companies with the aim of exiting after a certain period at a higher value.Cost of capitalThe minimum rate of return investors expect from an investment in return for the risk they take.BetaA coefficient measuring the sensitivity of a share's return to changes in the market return, that is, its systematic risk.Break-even pointThe sales volume or amount at which total revenue equals total cost and the business makes neither profit nor loss.Capital asset pricing model (CAPM)A model that calculates the cost of equity from the risk-free rate, beta and the market risk premium.
Last updated: November 8, 2026 · This definition is for general information only.