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Consolidated power is a regulated electric utility that has equity with a market value of $1.5 billion and debt outstanding of $3 billion. A consultant
Consolidated power is a regulated electric utility that has equity with a market value of $1.5 billion and debt outstanding of $3 billion. A consultant notes that this is a high debt ratio relative to the average across all listed firms in the market, which is 27%, and suggests that the firm is overly levered, and the debt ratio should be reduced. How would you respond to her suggestion?
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