Google recently had a debt-to-equity ratio of 0.04.Microsoft, one of its key competitors, had a debt-to-equityratio of 0.15. From a bank’s point of view, which of the twocompanies is a more attractive loan candidate, based onthis ratio? Why?

Google recently had a debt-to-equity ratio of 0.04.Microsoft, one of its key competitors, had a debt-to-equityratio of 0.15. From a bank’s point of view, which of the twocompanies is a more attractive loan candidate, based onthis ratio? Why?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 13QTD

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Question

Google recently had a debt-to-equity ratio of 0.04.
Microsoft, one of its key competitors, had a debt-to-equity
ratio of 0.15. From a bank’s point of view, which of the two
companies is a more attractive loan candidate, based on
this ratio? Why?

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