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Strategies & Market Trends : Free Cash Flow as Value Criterion -- Ignore unavailable to you. Want to Upgrade?

To: Pancho Villa who wrote (109)	11/3/1997 9:00:00 AM
From: Reginald Middleton	Read Replies (1) \| Respond to of 253

<A long time ago in Business school I remember studying about an "optimal" level of debt at which the present value of the tax shiled generated by the tax savings is maximized... In theory, beyond this optimal debt level the expected cost of financial distress (i.e. the probability of the company having to enter bankrupcy procedures times the estimated cost of bankrupcy procedures)starts diminishing the value of the firm.> you have just elaborated on the source of Michael Milken's fortune. While everybody was running away from highly leveraged debt, Milken was creating a VERY valuable empire. Wait until you see my writings in junk stock, which is very appropriate in this age of high valuations and 1 billion dollar share traded days. I think you will like it. PS And thanks for all of the compliments. RCM rcmfinancial.com