why do creditors prefer low debt ratios and stockholders prefer high debt ratios?

Answer 1

Creditors want to have some assurance of an ability to repay debt. Stockholders benefit from the company using someone else's money.

Answer 2

Creditors want low debt ratios because they want to be assured that they will get their money back without having to go through the court system. Stockholders prefer high debt ratios because the debt is owed to the stock holders themselves, and large debt ensures large tax breaks and is the product of innovation and research.

Answer 3

Personally, as an investor, I do not care for high debt ratios. But if earnings, sales, revenues are good, I will give this a low weighting factor in my consideration to buy.
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Answer 4

Debt can create leverage for stockholders which can magnify their returns. Leverage can also maginfy losses.