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If the company can generate a return high than the interest on borrowing, then they should borrow.
THanks for the quick responses,
opps..yes..singpost..why?
So far bond default is much more than share being delisted. Hence share investment will always over-take or out-perform in the long run comparing to bond!
pharoah88 ( Date: 25-Mar-2010 13:54) Posted:
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appEaring harmlEss
bOnds can bE dEadly
bOrrOw Other peOple's mOney tO makE mOney
sharE PRiCE gOes Up
bOrrOw Other peOple's mOney tO lOse mOney
sharE PRiCE cOmes dOwn
Solid financial grade does not mean prospective in business growth!
terryhoho ( Date: 25-Mar-2010 10:46) Posted:
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Borrowing fund means increasing gearing ratio, so it should be accomplished by increasing productivity, revenue expansion, reaching larger economic scale competitiveness, lower operation cost, building more brand image and stable if not incresing profit margin etc. then overall we would say, it is useful and in positive progress and development! Good example listed company here is CHINA JISHAN!
terryhoho ( Date: 25-Mar-2010 10:46) Posted:
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Are you referring to Singpost?
Tks
Hello there, Just a quick question to solve my mystery to shares trading,I'm looking in this company, it just announced a fixed income funding. How does it lead to changes in its share price?
additional note : the Bond is rated AA by S&P.
Cheers.