Capital Structure, Interest Coverage and Optimal Credit Ratings: A Report for Water UK
1 July 1999
By Drs. William Baker and Richard Hern with Matthew Bennett
The concern of this report is to identify the most efficient and prudent financing policy for water companies to adopt over the period 2000 to 2005. Specifically, we consider the optimal capital structure and credit rating that will enable water companies to finance their functions at the lowest costs. This report concludes that an efficient and prudent capital structure for UK water companies is consistent with a credit rating in the single A range.
