On Apr 27, 2009, at 11:38 AM, Bill Lear wrote:

I was also interested in the question that I raised about how stock
prices could affect prospects for getting loans for a company.  The
basic argument I made to a co-worker is that stock markets are not
very good for raising new capital --- at least they are not used very
much for that purpose.  The counter-argument is "Au contraire, stock
valuations are used to get financed".  And this, I believe, is very
dubious.

Most companies aren't public, so they don't have a stock price. But there's no doubt that for public companies, the stock price does affect perceptions of the firm's creditworthiness. And the looks, from admiration to pity, the CEO gets when he steps onto the links.

Doug
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