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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (12146)	6/21/2000 9:44:00 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Zeev, borrowing in order to increase return on equity is a strategy that may or may not be acceptable or desirable to company management. One might well ask why Microsoft doesn't generate more debt and expand more. Or if Microsoft is generating a lot of free cash flow, one might also wonder whether it should buy up some of its shares. Buying shares usually is only done when it is clear that they are undervalued by a significant amount, provided, of course, that the cash flow is sufficient to cover the costs. The reasons for incurring or not incurring debt are more personal and often have to do more with management style than with any formula for maximizing return on equity.