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Finance Glossary

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Bond Ratio

Definition:

The percentage of a company's capital that is represented by debt. If a company has total capital (debt plus equity) of $100, and $30 of that consists of bonds, then the bond ratio is 30%. As a very general rule, any bond ratio over 30% shows a highly-leveraged company, but this is not uniform. Some industries, like the airlines, traditionally have much higher bond ratios.

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