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It has to do with the company's balance sheet - their list of assets which they use to borrow money. If they have 1000 units that they say are worth $1 million
by squokko 3y ago
It has to do with the company's balance sheet - their list of assets which they use to borrow money.
If they have 1000 units that they say are worth $1 million each, they can borrow from banks as if they are sitting on $1 billion of assets.
If they sell one of those units at $500K, they now look like they have $500 million, which not only impedes their future borrowing but can trigger obligations to their current lenders.
- robertlagrant 3y agoIt would be surprising if they can just not sell things because they're too expensive, and then borrow based on that too expensive price. Why not just have a single one and price it at $1bn?