Unformatted text preview: This action was probably ill advised and hopefully a one time occurrence.
The firm’s total debt to total assets ratio was down to 42.5 percent ($370 million/$870 million) by
year-end 2010. Even if the $120 million portion of debt due in 2019 had not been paid off, and
$120 million was added to the numerator and denominator of the above ratio, the total debt to total
assets ratio would have still been a relatively healthy 49.5% ($490 million/$990 million) at year-end
2006. With $500 million in equity, total debt would have still been less than equity and long-term
debt considerably less.
The firm clearly generates enough cash flow to meet its dividend obligatio...
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