It Is Not Optimal to Borrow Any Further Funds When

question 63

Multiple Choice

It is not optimal to borrow any further funds when

• A) the average borrowing costs start to equal or exceed the ROA.
• B) the company's net profit margin falls below the average borrowing costs.
• C) the company's debt-to-equity ratio exceeds 50%.
• D) the average borrowing costs start to equal or exceed the ROE.

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Definitions:

Organizational Instruction

Guidelines or directives issued by an organization to guide actions and decisions of its members or employees.

Socialization

Socialization is the process by which individuals learn and adopt the norms, values, behaviors, and social skills appropriate to their society or culture.

History

the study of past events, particularly in human affairs.

Discriminatory Behavior

Actions that treat individuals unfairly or prejudicially based on certain characteristics, such as race, age, or gender.