3 ms·
I recall learning this too. I never heard that prices shouldn't go up. Maybe the above person meant that the total valuation shouldn't go up? If so, that logic
by y96V89C668e7Q74 7y ago
I recall learning this too. I never heard that prices shouldn't go up. Maybe the above person meant that the total valuation shouldn't go up? If so, that logic does check out.
- formercoder 7y agoI think we’re talking about Miller-Modigliani [1] which says that enterprise value should not change as capital structure changes. However it presumes many untrue aspects of the world in order to make this claim. [1] https://en.m.wikipedia.org/wiki/Modigliani–Miller_theorem https://en.m.wikipedia.org/wiki/Modigliani–Miller_theorem