The level of corporate debt has increased to the point that warnings are being sounded by credit rating agencies, international finance organizations, and others (such as former Federal Reserve Chairwoman Janet Yellen). At this writing, it stands at $15.5 trillion, 72 percent of the U.S. GDP about three percentage points higher than at the beginning of the Great Recession in 2008 and about 30 percentage points higher than the average during the period 1980 to 2000. Further, the amount of sub-investment grade bonds and leveraged debt (loans issued to parties with already-high debt levels and/or poor credit histories, typically carrying floating interest rates) has doubled since 2008, now representing about one-third of all corporate debt. Disturbingly, Moody’s reports that these instruments’ debt covenants (for example, the minimum ratio of current assets to current liabilities that must be maintained the quick ratio) are increasingly lax.

Question 

Based on its fiscal-year 2019 financial statements, Campbells Soup has a long-term debt to equity ratio of 7.78. The average for the S&P 500 in 2019 was .86. Comment on the attractiveness of a common stock investment in this company. See [www.investor. campbellsoupcompany.com/static-files/04597719-e3e5-4f45-a1ad-2b6b7cef6080]; and [www. yardeni.com/pub/spxratios.pdf].