llxx

I am struggling with this, you say assets in the denominator (Debt/Assets) would be lower (worth less than market) but so would debt

Isnt LTD recorded at amortized cost (add discount/less premium) so wont Debt also be understated so how can you be sure that Debt/Assets will be understated

In fact your NOPLAT is higher which will make Retained Earnings and hence Equity higher so wont D/E be understated?