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First, why shouldn't strategic buyers in other transactions insist on this structure and modify their takeovers to include the appropriate debt financing to sustain such a claim?
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As to what is the appropriate debt-to-GDP ratio to pursue in the long run, that is a difficult empirical question: when marginal increases in the debt-to-GDP ratio sharply raise expectations of long-run inflation and sharply raise real interest rates, then the debt-to-GDP ratio is more than high enough and should not go any higher.
Lawmakers (and regulators) could identify appropriate debt-to-income ratios and order the outstanding debts to give a priority to first- lien home mortgages.
"There was one big problem: The administration did not take the time to research an appropriate debt-to-income ratio or develop a defensible rationale for what would signal gainful employment.
Given this broad definition, one should realize that the components that make up GDP are hard to conceptualize in a manner that facilitates a meaningful evaluation of the appropriate national debt level.
Largely because of the troubles affecting the Chrysler division, DaimlerChrysler is being forced to offer yield premiums that are more appropriate for debt-ridden European telecommunications companies despite having the same credit rating as G.M. and the Ford Motor Company.
But heed Mr. Kantrowitz's advice about the appropriate amount of debt.
"But I accept that the discussion on the appropriate level of debt for the business will be important".
"A stable rating outlook would be restored if Qantas returned the profitability of its international and domestic operations to levels that would sustain appropriate levels of debt," he said.
Yet beyond issues of process and compliance, boards have a role in taking key financial decisions, such as ensuring appropriate levels of debt leverage, and scrutinizing major investments and acquisitions for value.
Borrowing to invest in a well-planned business you are launching is another example of an appropriate use of debt.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com