Tax on interest

Michael Pollak mpollak at panix.com
Thu Feb 13 17:59:35 PST 2003


On Thu, 13 Feb 2003 Nomiprins at aol.com wrote:

Lots! And enlightening as always. One question:


> Not only have we witnessed a meltdown of the highly leveraged telecom
> industry, but many of the most debt-laden energy corporations are about
> to join suit - I can think of about eight who'd be hard-pressed to
> withstand a 5-10% additional fall in stock values.

This is probably a silly question but why does a 5-10% fall in stock value have to hurt a corporation's debt position? From a debt perspective, aren't the important things underlying asset value and cash flow, which could conceivably be exactly the same after a 10% fall?

Michael



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