Data Update 6 for 2023: A Wake up call for the Indebted?
Musings on Markets
FEBRUARY 27, 2023
In fact, at a zero percent tax rate, the optimal debt ratio, if you define it as the mix that minimizes cost of capital is zero. Cash generating capacity : Debt payments are serviced with operating cash flows, and the more operating cash flows that firms generate, as a percent of their market value, the more that they can afford to borrow.
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