Typically,the book debt ratio exceeds the market debt ratio for the nonfinancial corporate sector.

Question

Quizplus · Accepted Answer

This is generally true due to the fact that nonfinancial corporations are able to borrow at a lower interest rate than that which is offered in the market. Additionally, market debt ratios can be affected by factors such as bond pricing and investor sentiment, whereas book debt ratios are based on the actual amounts owed by the company.

Typically,the Book Debt Ratio Exceeds the Market Debt Ratio for the Nonfinancial