The eternal quest for returns

Like the quest for the Holy Grail, the search goes on for returns gained from understanding the link between the value of a company's debt and its equity

The Holy Grail has inspired countless quests over the centuries, most recently attracting the attention of Tom Hanks in the film version of Dan Brown's Da Vinci Code. In finance, the grail that everyone is seeking is the magic formula for eternal wealth. Many industry professionals spend their lifetimes searching for it. One clue has been the work done by Nobel prize-winning economist Robert Merton et al which describes equity as a call on a company's assets after all the claims of the company's