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25% rule

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25% rule
The guidelines that bonded debt over 25% of a municipality's annual budget is excessive.

25% rule
In municipal bonds, an unofficial rule stating that a municipality with bonds in excess of 25% of its annual budget has too much debt. A municipality with bonds worth more than this may find its credit ratings negatively impacted. The 25% rule provides a guideline for credit agencies and investors on the riskiness of municipal bonds.


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In addition to the 25% rule, another test applies: The initial amount of life insurance protection cannot exceed 100 times the monthly annuity payable upon retirement.
Diaz also commented on CMS's proposal to extend the LTAC Hospital within Hospital 25% rule to freestanding LTACs.
TRRU Metrics joins several existing IP valuation methods including Discounted Cash Flows (DCF), DCF with Monte Carlo stochastic modifiers, lost royalties, the 25% rule, and the method of comparables.
 
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