RE:RE:Debt
lb1temporary wrote: Perfect example of theoric maths. It looks like logic but there's a missing part.
For example with a 1,5 B$ EBITDA if you have no debt to repay, you will have all the 1,5 B$ EBITDA for 200 M shares; it's a 7,5 $ EBTDA per share.
With the leverage, you have 1,5 B$ minus 420 M$ interest paid and 1, 080 M$ Ebtda for 100 m shares that is 10,8 $ EBTDA for each shares.
In the first case the return will not be sufficient to sustaint a 60$ share price and your SP will fall (maybe at 40$) to meet a more balanced position.
Your missing part is the return on equity.
Leverage is a good thing, the trick is to have a moderate leverage to optimize the return whithout having a bad credit rating.
to add to this , the bomber would have to compensate each shareholder for the added shares to the float ... the bomber could allow shareholders to buy the "new shares" at a discount or get a monetary payout for the compensation ... one thing is for sure , there needs to be some extra positive news to foillow the move because there would definately be a selling pressure at first ...whatever avenue they decide to take the important thing is to keep the positives coming , which they are doing very well now ..the skies are blue folks..GLTA