Deluxe Corporation Case 35 (I can send excel template) From Case Studies in Finance (Bruner)

Drawing on the financial ratios in case Exhibit 6, how much debt could Deluxe borrow at each rating level? What capitalization ratios would result from the borrowings implied by each rating category?

Using Hudson Bancorps estimates of the costs of debt and equity in case Exhibit 8, which rating category has the lowest overall cost of funds? Do you agree with Hudson Bancorps view that equity investors are indifferent to the increases in financial risk across the investment-grade debt categories?