Debt to Equity question

W

WhiteOut56

Looking at yahoo finance key stats

StockA: Debt to equity of 100
StockB: Debt to equity of 20

.... long story short stock A has more debt

all things considered equal if interest rates rise...

Should stockB outperform stockA?
 
Quote from WhiteOut56:
----Debt to equity of 100
----Debt to equity of 20
----interest rates rise...
More...
1) The growth rates and P/E ratios should have more bearing on the stock performance.
2) A company can have "a lot" of debt but if the debt is invested in a high-growth business, interest rate increases won't matter. :cool:
 
Quote from nazzdack:

1) The growth rates and P/E ratios should have more bearing on the stock performance.
2) A company can have "a lot" of debt but if the debt is invested in a high-growth business, interest rate increases won't matter. :cool:
More...


But usually the debt is used for crap acquisitions. Like HP buying Palm and then throwing away the entire technology a few months later.

Microsoft buying Danger for 1.2 billion and then throwing out the tech a few months later.

Usually the debt is used for acquisitions that end up falling into goodwill and expensed out over the years.
 
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