Lets also not forget that futures, in general, are priced based on spot + cost of carry and really should not be looked at as a forward indicator to the potential price of a commodity.
No, you missed the point. In a world without taxes debt and equity mix does not matter because the individual investor can create or destory leverage. In this case, our world *has* taxes, which introduces tax shields that have a positive net present value.
I wouldn't put the final nail into Blockbuster until movie on demand technology is completed and fully implemented. I personally believe that the cable companies will have the last laugh in all of this once people have the full ability to watch any movie at the quick push of a button. This technology is already implemented with services like Adelphia on Demand. Once these packages become more competitive Netflix and Blockbuster may just go the way of the dinosaur unless they move into a new or undeveloped market?
Not to mention, debt can have a favorable impact on shareholder wealth by both creating tax shields and leveraging invested capital. The capital structure (the mix between debt and equity) is not a really good way to compare two company's success when one company has a large physical asset base and the other is mainly inventory and service.
ROI, ROA, EPS, and P/E are all good indicators to dictate which company is more successful. For more information on debt-to-equity and capital structure mixes, see the Modigliani-Miller Theorem Part I & II: With Taxes.
I think MTV did an OK job. At least l0pht and anti-online had a say. It's too bad that they didn't go more into the terminology. One thing that I didn't like was those loser kids they followed around that appeared to be just a bunch of script kiddies. Thats just my two cents.. -Pre
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Lets also not forget that futures, in general, are priced based on spot + cost of carry and really should not be looked at as a forward indicator to the potential price of a commodity.
No, you missed the point. In a world without taxes debt and equity mix does not matter because the individual investor can create or destory leverage. In this case, our world *has* taxes, which introduces tax shields that have a positive net present value.
;)
Hence the reference to MM Prop I&II with taxes
No idealistic BS here, these are proven.
I wouldn't put the final nail into Blockbuster until movie on demand technology is completed and fully implemented. I personally believe that the cable companies will have the last laugh in all of this once people have the full ability to watch any movie at the quick push of a button. This technology is already implemented with services like Adelphia on Demand. Once these packages become more competitive Netflix and Blockbuster may just go the way of the dinosaur unless they move into a new or undeveloped market?
Not to mention, debt can have a favorable impact on shareholder wealth by both creating tax shields and leveraging invested capital. The capital structure (the mix between debt and equity) is not a really good way to compare two company's success when one company has a large physical asset base and the other is mainly inventory and service.
ROI, ROA, EPS, and P/E are all good indicators to dictate which company is more successful. For more information on debt-to-equity and capital structure mixes, see the Modigliani-Miller Theorem Part I & II: With Taxes.
I think MTV did an OK job. At least l0pht and anti-online had a say. It's too bad that they didn't go more into the terminology. One thing that I didn't like was those loser kids they followed around that appeared to be just a bunch of script kiddies. Thats just my two cents.. -Pre