By: Sanjay T. Menon
Louisiana State University Shreveport
The word “empowerment” can mean different things to different people. It can mean the act of empowering, such as delegation or giving employees the authority to make decisions. It can mean the process of empowering, for example, reducing red tape and giving employees the needed resources to do their work as they think it needs to be done. It can also mean making employees feel empowered, for example, by providing opportunities for employees to contribute ideas and participate in decision making. It is therefore not surprising that different authors have different ideas and suggestions regarding empowerment.
Determining Credit Spreads for Private Firms That Have No Credit Rating
By nature, companies must pay–or be prepared to pay–a price for the goods and services they use in their activities, what ever their area of business. So clearly companies require financial resources in order to make those payments. As we all know, there are three main sources of funding: internal resources generated by the company’s operations, funds contributed by the company’s owners or partners, and funds raised through some form of debt.
Generally, companies take on debt according to the characteristics of the products or services offered, the commercial phase of the business, the type of market in which they operate, legal and tax restrictions, and other factors. According to the rating assigned to the company by a rating agency or credit institution, lenders decide what interest rate must be paid on the loans that will be extended to the company, or what yield at maturity a bond issued by that firm must offer.
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