Re:CenturyLink to Buy Level 3 for $34B
by csl on Monday October 31, 2016 @08:30AM
(#12836100)
I'm not a finance guy, but isn't that just econ 101?
Your company is valued at X, you take on Y in loan and invest some of that into, e.g., buying and laying fiber. Your company will now be valued at X+f*Y, where f is some adjustment factor. E.g. you may not get the same money back if you sold the fiber today. On the other hand, that fiber is projected to earn you some money over time.
I do agree those are huge figures, but it could make sense.
Your company is valued at X, you take on Y in loan and invest some of that into, e.g., buying and laying fiber. Your company will now be valued at X+f*Y, where f is some adjustment factor. E.g. you may not get the same money back if you sold the fiber today. On the other hand, that fiber is projected to earn you some money over time.
I do agree those are huge figures, but it could make sense.