Originally Posted by
Crac A Jac
Sounds like a large amount of dead interest money is going out of the loop into the pockets of the lenders, to no gain to MRP; Nothing to lose by getting rid of debt, except the notion that it is always good to have a debt/equity ratio to talk about, and have dividends to talk about. Cut to the chase see the big picture and increase long term shareholder (Kiwisaver?) wealth rather than work your butt off for the bondholder/banker etc paying interest unnecessarily..
Saying you have a manageable debt to equity ratio is a bit meaningless ;debt is for investment, not dividends.Not just talking MRP, but many/most other companies.
But it seems politically incorrect/ not acceptable to the market to not have dividends, which is a bit irrational.
Think about it though; would you borrow money just to pay yourself??
Taken to the extreme, IIRC Hanover Finance directors paid themselves the entire value of the company leaving it with an infinite debt to equity ratio, worked out real well(for some)...