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Correct, thanks for bringing to attention that distinction. My point is that the idle capital held in monetary form does nothing, so I want to disincentivize t
by pa7x1 6y ago
Correct, thanks for bringing to attention that distinction.
My point is that the idle capital held in monetary form does nothing, so I want to disincentivize that to some extent. While I have nothing against that capital being available to an enterprise, they inject it back to the economy through their CapEx, R&D, income for employees, etc...
Potentially a company may also sit in vast piles of idle money (e.g. Apple), the value of the company will take into account the DCF and also the existing liquid reserves. In that case the liquid reserves will be progressively diluted by inflation and again, that's a desired outcome (in my view).