User 225407

Anheuser Busch: The First Round Is On Bud Shareholders

To Antti:

On Your First Paragraph:

The Modigliani-Miller theorem is one of the foundations of any finance class at any respected american university. It was invented at MIT's Sloan School of Managment, and is taught at other top business schools such as Wharton, Stern, and Harvard. It won it's authors a Nobel Prize in economics.

You are complaining that leverage makes financial distress worse, as highly-leveraged firms struggle to pay off creditors. That is true, and the theorem accomodates that. However, it is irrelevant to Anheuser-Busch. The financial distress in today's economy is primarily coming from the Financial and Airline sectors, not beer.

On Your Second Paragraph:
That's great, but Anheuser-Busch is already a publicy traded company, so the family-owned issue is irrelevant.