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Notices
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Gaurang Trivedi (not verified)
26th July 2021 | 1:53am

Stefan, your cited paragraph is analytical and forward looking. Should CEOs care about past decisions? Absolutely! Analysts should also be looking at past decisions to assess managerial quality. Furthermore, past decisions find their way into Book Value, a metric mostly ignored in modern day "forward looking" financial analysis. Since value of historical debt decreases due to inflation (forward looking), any structuring of historical debt would result in higher interest expense (again forward looking), unless the floater was negatively correlated.