Data Update 8 for 2025: Debt, Taxes and Default - An Unholy Trifecta!
Musings on Markets
FEBRUARY 23, 2025
The Debt Trade off As a prelude to examining the debt and equity tradeoff, it is best to first nail down what distinguishes the two sources of capital. By that measure, equity is free at companies that pay no dividends, an absurd conclusion, since investors in equity anticipate and build in an expectation of price appreciation.
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