3 ms·
I don't think your logic makes sense. Let's assume the company has an infinite fountain of moneymaking ideas, as you posit. Why would there need to be any ear
by erikpukinskis 8y ago
I don't think your logic makes sense.
Let's assume the company has an infinite fountain of moneymaking ideas, as you posit.
Why would there need to be any earnings at all to fund those ideas? Why not just take on debt to fund those ideas? Presumably companies are already taking debt to fund all of their good ideas, and any ideas that are left are "not that good".
The appearance of earnings should have no effect on the number of good ideas available. Why would it?
- harryh 8y agoYou (perhaps intentionally, perhaps not) have stumbled into a whole other topic: Companies need capital. There are generally two ways to raise capital: debt and equity. How do companies choose between these two options? It turns out that there are a pretty large number of factors and it's a complex and interesting topic.