individual borrowing w/ limited liability
Michael McKenney ( mmckenne@ins.state.pa.us )
Mon, 03 Aug 1998 11:37:21 -0400
Chapter 17, p.451 states, "Many individuals would like to borrow with
limited liability. They might, therefore, be prepared to pay a small
premium for levered shares..."
How is buying levered shares like borrowing with limited liability?
Purchasing levered shares increases the risk (and therefore return), but
you're still paying money for a stream of earnings or a hope for capital
gain. This is nothing like borrowing!
Any comments?