Some corporations debtequity targets are expressed not as a debt ratio but as a target debt rating

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Some corporations’ debt–equity targets are expressed not as a debt ratio but as a target debt rating on the firm’s outstanding bonds. What are the pros and cons of setting a target rating rather than a target ratio?

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Principles of Corporate Finance

ISBN: 978-0077404895

10th Edition

Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen

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Question Posted: Dec 31, 2012 09:44 AM

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Some corporations debtequity targets are expressed not as a debt ratio but as a target debt rating

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One advantage of setting debtequity targets based on bond ratings is that ...View the full answer

Principles of Corporate Finance

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