Users of Financial Statements Consider a Lower Debt to Total

question 24

Multiple Choice

Users of financial statements consider a lower debt to total assets ratio to be

• A)worse because it indicates higher risk of defaulting on debt payments.
• B)better because it indicates that a company has lower leverage.
• C)worse because it indicates reduced risk of defaulting on debt payments.
• D)better because it indicates that a company has higher leverage.

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