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Merger idea... CP+IC&E+DM&E+KCS
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[quote]QUOTE: <i>Originally posted by Murphy Siding</i> <br /><br />Future Model : Hang on a minute, my head is spinning , and I can't get it to stop. If the DM&E borrows 2 billion dollars, the figure they say need to BORROW, how does that not necessarily imply debt???? I'm not sure I understand your comments about the utility companies having the DM&E's back? In the real world of business, the utilities would buy their coal from the devil and ship it on horseback, if that was the most cost effective source. They won't pay the DM&E a premeum and I can't see how the DM&E would be able to do it at a discount? <br />[/quote] <br /> <br />Spinning, you say? Hmmmm, if only there was a way we could tap that for a new energy source. <br /> <br />If DM&E says they are borrowing 2 billion, that may be the up front money to pay for construction. It may be that later they will issue stock to pay down this debt. I wouldn't normally expect a company to borrow that much, but then again with interest rates as low as they are right now, it may make more sense for them to borrow with low interest rates and then later retire some or most of the debt later with equity financing. Bottom line - if someone is willing to loan them that amount at reasonably low interest rates, then common sense says go for it.
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