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Roland Stumon
on Nov 04, 2024

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

A) a low times-interest-earned ratio.
B) a low debt-to-equity ratio.
C) a high quick ratio.
D) a low debt-to-equity ratio and a high quick ratio.
E) a low times-interest-earned ratio and a high quick ratio.

Times-Interest-Earned Ratio

A financial metric used to measure a company's ability to meet its debt obligations based on its earnings before interest and taxes (EBIT).

Debt-To-Equity Ratio

An economic indicator reflecting the balance between equity and debt in funding a corporation's resources.

Quick Ratio

A liquidity measure that indicates a company's ability to meet short-term obligations with its most liquid assets, excluding inventories.

  • Understand the significance and the underlying principles of bond ratings in making investment choices.
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Sarah NelsonNov 04, 2024
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