Monday, June 25, 2007

Debt in corporate finance 101


Damodaran Online: Home Page for Aswath Damodaran

Ratings agencies want companies to issue equity, since it makes them

safer. Equity research analysts want them not to issue equity because it

dilutes earnings per share. Regulatory authorities want to ensure that

you meet their requirements in terms of capital ratios (usually book

value). Financing that leaves all three groups happy is nirvana