A Company Wants to Maintain Its Current Debt/equity Ratio

question 37

Multiple Choice

A company wants to maintain its current debt/equity ratio. Which of the following relationships would most likely occur on the cash flow statement?

• A) Cash from operations would be equal to any debt paid off during the year.
• B) Cash from operations would be equal to cash from financing activities for the year.
• C) New borrowings would be less than cash from operations for the year.
• D) New borrowings would replace any debt paid off.

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Definitions:

Socially Constructed

An idea or notion that is created and developed by society rather than naturally existing.

Generalized Other

An abstract composite of social roles and social expectations.

Socialization

The process by which individuals learn and adopt the norms, values, and behaviors appropriate to their society or cultural group, essential for integration and functioning within their community.

Annette Lareau

A sociologist known for her work on social class influences on parenting styles and their impacts on children's lives.