The Higher the Percentage of Total Debt to Total Assets

question 148

Multiple Choice

The higher the percentage of total debt to total assets the greater the risk

• A) that the company will be able to pay all its debt.
• B) that the company will purchase more assets.
• C) that the company will be able to obtain financing.
• D) that the company may be unable to meet its maturing obligations.

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Definitions:

Consumers

Individuals or organizations that use economic goods and services generated within the economy, directly affecting demand trends and market dynamics.

Corporate Taxes

Taxes levied by governments on the income or profit of corporations and businesses.

Profits

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Firms

Business organizations involved in the production and sale of goods and services.