In Considering Equity and Debt Financing, Which of the Following

question 35

Multiple Choice

In considering equity and debt financing, which of the following statements is generally true?

• A) The lower the measure of the long-term debt to equity ratio, the greater the likelihood that the company will have difficulty in meeting its obligation in some future period.
• B) Interest and dividend payments are not required to be made by the issuing company.
• C) The higher the measure of the debt to equity ratio, the greater the likelihood that the company will have difficulty in meeting its obligation in some future period.
• D) Most companies prefer to have no debt and rely exclusively on equity financing.

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Definitions:

Product Design

The process of creating and developing a new product or improving an existing one, focusing on its features, functionality, aesthetics, and usability.

Sourcing Processes

The methods and procedures used by businesses to identify, evaluate, and contract with suppliers of goods and services.

Supplier Performance Analysis

A method used to assess and measure the effectiveness and efficiency of a supplier's performance in terms of quality, delivery, and cost.

Portfolio of Suppliers

The diverse group of vendors and suppliers that a company utilizes to procure goods and services necessary for its operations.