In today’s briefing:
- Both Bond Investors and Stock Investors Are Focused on Future Cash Flows that a Company Will Produce
Both Bond Investors and Stock Investors Are Focused on Future Cash Flows that a Company Will Produce
- It’s true that measures to raise P/B that focus on strengthening shareholder returns are unpopular with investors, while excess cash on hand should be returned to shareholders under stagnated ROE.
- Both bond and equity investors are focused on the future cash flow a company will generate, and increasing cash flow is consistent with the goals of a public company.
- If a company can’t use cash reserves to increase corporate value, it should either return excess cash to shareholders or change to a manager that can use cash for growth.
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