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  "notes": "The slide presents findings from a BCG investor survey conducted in January 2024.",
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      "text": "Investors continue to be wary of leverage in the current macroeconomic environment (especially given higher interest rates), but they remain open to supporting well-grounded and clearly articulated growth and M&A agendas.",
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      "text": "Source: BCG Investor Perspectives Series, Q1 2024, January 16–18, 2024; n = 153. Note: For additional BCG perspectives on resilience, visit https://www.bcg.com/en-ca/capabilities/business-resilience. For BCG's views on macroeconomic topics, visit https://www.bcg.com/en-ca/bcg-henderson-institute/center-for-macroeconomics.",
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      "text": "January 16–18",
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      "text": "Similarly, 81% of investors (near the October 2023 result of 83%) are supportive of companies investing in innovation and go-to-market strategies even if that affects their margins short term, while 73% of investors (down from 79% in October 2023) support companies hunkering down—that is, focusing on reducing costs to strengthen near-term profitability and not reinvesting cost savings into medium- or longer-term growth",
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      "text": "Surprisingly, and somewhat inconsistent with what BCG hears in investor conversations, the current survey indicates that many investors still are open to debt-funded M&A—65% of investors are supportive of companies making substantial or even transformative acquisitions (significantly above 20% of their own market cap) that have the potential to be strategic and competitive game changers for the company, as long as acquirers are financially healthy and the current environment does not pose a risk for their ability to reduce leverage within the next one to two years",
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      "text": "About 69% of investors are actively avoiding or reducing exposure to companies carrying higher leverage (for example, above three times the net debt-to-EBITDA ratio), and 44% of investors are even doing so for companies carrying near-average leverage (for example, about two times the net debt-to-EBITDA ratio)—those results are consistent with recent investors' comments that 1.5 times net debt to EBITDA is the new 2.5 times",
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      "text": "While these findings appear contradictory, they are consistent with recent conversations BCG had with quality investors who highlighted that companies should not surprise investors with long-term investments that result in earnings misses; instead, investments should be funded through incremental cost reduction, and/or executives should make the case for temporarily muted earnings and margins to support more robust long-term value creation",
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      "text": "For companies with near-term debt maturities, 73% of investors now consider rollover risk and interest coverage ratios, rather than leverage ratios alone—that has been reinforced in conversations with many seasoned investors, suggesting that the interest coverage ratio is an important consideration for the first time in 15 years",
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      "text": "In contrast, 75% of investors are supportive of companies making focused tuck-in acquisitions (for example, well below 20% of their own market cap) that do not materially increase their leverage, which is very consistent with the typical investor commentary",
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      "text": "Investments for growth and top-line protection remain investors' number one priority, ranked as a top-three priority for financially healthy companies by 71% of investors (up from 68% in October 2023); at the same time, the share of investors that rate building financial resilience and managing cash flows as a top-three priority for financially healthy companies dropped to 49% (from 63% in October 2023), and 35% (near the October 2023 survey result of 37%) view preserving or expanding gross margins among their top three priorities",
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