Iron Ore Price, page-18109

It depends on the sector and then the company.

An appropriate amount of debt does lower the cost of capital and concentrates the equity rewards. If FMG has sustainably moved down the cost curve than 20-25% debt should be manageable, but concur than 10-15% would be about right given lack of diversification (commodity price risk and production chain risk).

Buying meaningful diversification though would mean big game hunting. At least a 5B market cap with existing strong cashflows. So either more debt or twiggy diluting. Neither sounds that palatable.

Some here though have confused what paying down the debt levels from here will mean, FMG equity passed the point of being discounted for debt stress some time back. The net debt is a straight deduction now from enterprise value, nothing more.

Agree completely on the buyback being the last priority. It is financially naive for some to have been clamouring for a buyback to precede an investment credit rating.