ahhaha's ahs Message Board

To: ahhaha who wrote (11826)

10/8/2008 6:48:06 PM

You are mixing up cause with effect. Corporations that continue to create capital have no problem raising equity - regardless of debt levels. Those devoid of capital creating ideas fall into the Schumpeteran event horizon, and find themselves only able to sell debt. The latter observation reflects the condition that equity holders require a higher return than debt holders.