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QUESTION
Today's historically low interest rates may be skewing the Weighted Average Cost of Capital (the WACC), and making it unreasonable for some companies...
Today's historically low interest rates may be skewing the Weighted Average Cost of Capital (the WACC), and making it unreasonable for some companies to NOT borrow funds. This allows them to keep their cash positions safe. How sustainable is this situation? What are the potential pitfalls? What should companies be watchful for as they increase their debt? When is enough debt, enough?
