Does change in current market yields affect a company’s D/E? My understanding is it woulnd’t because Debt is measured using amortized cost and equity is on the BS as paid in cap + ended retained…I thought I came across a practice problem that said it was affected by a chnage in yields- am I mistaken? What does affect D/E other than issue more debt or equity (obvious)…what about a buy back is the change in the amount of debt & EQ the exact same so the larger % change would prevail?
Thanks,