Was corporate profit growth a bubble inflated by "financial engineering"?

Re:Was corporate profit growth a bubble inflated by "financi... by otoburb on Friday March 27, 2020 @03:04PM (#22705790)

>>If, over the long term, CAPEX spendings do not produce profits, it means that the purchased assets did not produce enough payoff to compensate for their depreciation charges.

Even if CAPEX generates profits, if the returns were lower than your capital cost then company would have been better off not investing and returning that instead to shareholders.

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Re:Was corporate profit growth a bubble inflated by "financi... by H8crilA on Friday March 27, 2020 @03:15PM (#22705883)

Yes, that's the 101 of being a capital allocator, like a CEO or a CFO. Only invest into anything if the returns exceed your cost of capital.

Presentation on this very topic: https://youtu.be/c20_S-QgvsA?t=730

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Re:Was corporate profit growth a bubble inflated by "financi... by gowld on Saturday March 28, 2020 @04:41PM (#22714168)

Shareholders would be better off, not company better off. Wage earners in the company got paid.

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