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Sure. There is indeed quite a bit of flexibility in adjusting the leverage of a business, assuming that it is still a going concern. So was your comment about
by jkhdigital 4y ago
Sure. There is indeed quite a bit of flexibility in adjusting the leverage of a business, assuming that it is still a going concern.
So was your comment about "high equity" just about leverage? Like, everyone worries about high leverage but no one seems to care about low leverage (which could be an inefficient capital allocation)? It's just an unorthodox way to put it, that phrase
- eru 4y agoPeople seem to be worried about the total amount of debt. At most they compare debt to GDP. You almost never hear these panic pieces talk about debt vs equity. Btw, if people are worried about debt, the first thing we should do is put equity financing on the same footing as debt financing. As it stands, companies largely service their debt with pre-tax money but pay for their cost of equity with post-tax money.