Each share in this case once again, if you believe that the assets are worth 1 million are going to be 1 million.

It's not like when you go into bankruptcy the company just disappears.

liabilities.

So far they look very, very identical.

Howard Winklevoss founded a firm whose assets are in the hundreds of millions.

But that's not the case.

So the 1 million asset would really become an 800,000 asset.

Do Low Interest Rates Ensure High Asset Prices?

You don't even need the loan.

And this was a home equity loan.

So its assets.

I'll do that in yellow.

That assets, A for assets, is equal to

My uncle is possessed of great wealth.

My uncle possesses great wealth.

Bank B has borrowed money from Bank C.

And then when we go and get the property because the

So once again, I'm stuck holding this non liquid asset.

Actually, let me draw a couple more assets here just to show you this is the stinkiest of them all.

Malibu Equity and Investments.

The kids make up the names of the countries some are rich some are poor.

It's plastic pollution.

I have a 1 million house on my balance sheet.

Well, this is New York State, Art. You'll write her a check for half of everything.

And what I wrote here is, it has 4 billion of liabilities.

So the value of my assets go down by 50 .

Obviously , a machine you can't do all of those things to it, but you can at least touch it and possibly smell and taste it.

You'd have to give up 93 of your net worth.

I don't want to draw this box.

And rich, eh?

Mortgage backed security.

Investment has to be, in the new economy, protecting and nurturing the ecological assets on which our future depends.

But just think of it this way, leverage is the ratio of how much assets you have over how much equity you have.

Remember liabilities plus equities are equal to assets.

So they sell them and they only get 1 billion for them.

They are very intangible at this point.

It should start to make a little bit of intuitive sense

Malibu Equity and Investments. Roger Van Zant.

Or they just have a super flush bank account.

So 225,000

What I want to do here is focus on valuation and see whether the price to earnings ratio holds up to scrutiny in this situation, where you have an identical asset but very different capital structures.

So what are my assets?

She has some money of her own.

liabilities plus equity.

So that's the situation we're dealing with.