Discuss alternative measures of financial leverage. Should the market value of equity be used or the book
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Discuss alternative measures of financial leverage. Should the market value of equity be used or the book value? Is it better to use the market value of debt, the book value, or the book value discounted at the risk-free interest rate? How should you treat off balance- sheet obligations such as pension liabilities? How would you treat preferred stock, deferred tax reserves, and minority interest?
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The answer as in all questions pertaining to financial ratios is It depends on what you want to use the measure for For most purposes a financial mana...View the full answer
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Related Book For 
Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers
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