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I am totally with Fuskie on this one.

With the cost of debt so low and the high return Disney seems to be getting recently on its use of the dept with DCA being the most recent example why wouldn't you want Disney using debt. As long as the return on investment is higher then the interest rates they are paying we win.

Now if I am managing Disney's finances I do want to be prepared for the impact of increases in the cost of debt so as long as they are prepared to handle that we are good. And things like issuing stock are things they can do if debt rates get high.

Same goes for dividends. If they can grow the profits at a higher rate then dividends gets me go for it. When a company is mature and not in a growth stage bring in the dividends. But right now the Disney theme parks in particular seem like a gold mind so why not keep investing and expanding in the goal mind especially when the model says that you can raise prices much higher then the investments and gain more people.

Disneyland in CA is now $87 a day for one park and $125 for both parks and based on attendence there is still plenty of room to raise the admission costs further.

Moe
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