All other things the same, those who hold the company's debt (i.e., its creditors) would like a low debt-to-equity ratio to provide a buffer of protection.

Question

Quizplus · Accepted Answer

A low debt-to-equity ratio indicates that the company has a lower level of debt compared to equity, which reduces the risk of defaulting on debt payments. This makes the company a safer investment for creditors, as there is a greater chance that they will receive their payments back.

All Other Things the Same, Those Who Hold the Company's