Owners of bonds would prefer
1) a debt ratio of 60 percent to a debt ratio of
40 percent
2) a debt ratio of 40 percent to a debt ratio of
60 percent
3) a times?interest?earned of 5.1 to a
Times-interest-earned of 3.9
4) a times?interest?earned of 3.9 to a
Times-interest-earned of 5.1

Question

Quizplus · Accepted Answer

Bond owners prefer a lower debt ratio (40%) as it indicates less financial risk and a higher times-interest-earned ratio (5.1) as it shows better ability to cover interest payments.

Owners of Bonds Would Prefer