inflection point

This is more what I find with companies, which is there's a gradual decrease in your cost of capital as you go from the current debt ratio to the optimal.

And then there is this inflection point where all hell breaks loose.

Notice where that is? Between 40 and 50, you suddenly start climbing.

So basically what it says is when you hit that inflection point, you're all of a sudden going to see a cost of capital increase.

So what's the next implication of that? If you're going to make a mistake, which direction should you make the mistake in? Having too little debt or too much debt? You want to kind of undershoot rather than overshoot.

It's a lesson that I think we need to keep in mind when we push companies towards borrowing more.

If you push them towards an inflection point, you could be putting their entire future at risk because a company could start blowing up on you.

This is the fourth edition of the book you have, and in each edition I've looked at Disney's optimal.