Susan asks…
How does better investment possibilities affect optimal debt ratio?
finance question:
How does better investment possibilities affect optimal debt ratio?
Stan answers:
If they have more investments they should have less debt. Debt kills business. The less debt the better the business.
George asks…
How does GDP to debt ratio affect investors. Anyone with insight?
I’d like to know about GDP to debt ratio. Anyone with insight? How does it affect an investor?
Yes, I meant debt/equity.
Stan answers:
The Debt-to-GDP ratio compares the national debt to what a nation produces. Its a coverage ratio that measures how well the nation can pay its debt. A large national debt tends to push up interest rates. It makes it harder for businesses to borrow and raises their cost of capital, which means they have generate higher returns to draw investors.
Robert asks…
What do numbers mean in debt/ratio equity?
Looking at MSN investing, MacDonalds number is .83, as opposed to Boeing 50.64. That seems like a wide spread. So debt/equity ratio which is a better number and why?
Stan answers:
Lower debt/equity ratio is better because it means that lesser of the company’s capital comes from borrowing. In a company’s capital structure, the debt holders are always ahead of the shareholders; therefore, if a company’s debt/equity ratio is high, there is less money left over for capital spending and dividends.
Betty asks…
ryan, how can i recieve a higher credit rating, my debt to income ratio is too high?
with all those debts on my record, my income/debt ratio is too high! the divorce provided specifically the debt he is responsible for, i have asked him to remove my name as he is the primary card holder. on the house, he was supposed to re-finance, i signed a quick claim deed, and was given my share, why does it still show up?
Stan answers:
It can take 3-6 months to come off your credit report depending on when he rakes your name off and when the company finally updates the credit agency. If you need a loan, get written confirmation from the credit card company and some lenders will take that into consideration.
Lisa asks…
First time Home Buyer- which is better a lower debt ratio or bigger down payment?
When buying your first home, with a great credit score, which is better- a lower debt to income ratio (which is already below 38%) or a larger down payment. Not sure if I should keep overpaying bills or start saving more!
Stan answers:
Keep overpaying, but maybe not as much. Save the rest. The bigger your downpayment is, the less you have to finance. The less you have to finance, the less interest you will have to pay.
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