Which of the Following Ratios Measures the Proportion of a Firm's

question 109

Multiple Choice

Which of the following ratios measures the proportion of a firm's total assets that have been acquired with borrowed funds?

• A) fixed asset turnover
• B) total asset turnover
• C) debt ratio
• D) times interest earned ratio

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Definitions:

Flotation Costs

Flotation Costs are costs incurred by a company when it issues new securities, including underwriting fees, legal fees, and registration fees.

Cumulative Preferred Stock

Cumulative preferred stock is a type of preferred share that accrues dividends in case they are not paid out in the year they are due, ensuring dividends are paid out before any are distributed to common shares.

Marginal Income Tax Rate

The proportion of tax levied on your earnings for every tax bracket you fall into.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders.