To earn a high rating from the bond-rating agencies, a firm should have

Question

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Bond-rating agencies look for a low debt-to-equity ratio as it shows that the firm has a lower level of debt relative to equity, indicating a lower risk of default. A high quick ratio is also desirable as it shows that the firm has enough liquid assets to cover its short-term liabilities. Therefore, a firm with a low debt-to-equity ratio and a high quick ratio is likely to earn a high rating from bond-rating agencies.

To Earn a High Rating from the Bond-Rating Agencies, a Firm