31 LR Two Question 3
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It's pretty far—neither David nor Lin address the question of how much leverage companies ought to have.
You might see this more clearly if you substitute the tangible idea of money for the intangible leverage—see? We don't know how much money companies need, in the same way we don't know how much leverage they need.
Hi Dave, to me the choice between C and D came down to the issue of absolute quantities of leverage vs. the standard for appropriate leverage. "little leverage" and "sufficient leverage" are meaningless without a fixed standard, so what significance can "amount of leverage" have in this context? Isn't the standard for how much leverage should be afforded really the issue?
Yes! In order to resolve their dispute, we'd absolutely need a standard, as you've correctly pointed out.