- Ability to borrow. The amount a firm can borrow up to the point where the firm value no longer increases. The New York Times Financial Glossary
* * *the possibility that a person or company has for borrowing more, depending on how much has already been borrowed and their ability to repay the debts:
• Cash flow is the typical measure for determining additional debt capacity.
* * *debt capacity UK US noun [C or U]► FINANCE a measurement of the amount of money that a person or company can borrow and pay back during a particular period without any financial difficulty: »
Changes in revenue and interest rates can affect the value of a firm and its optimal debt capacity.
Financial and business terms. 2012.
Look at other dictionaries:
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