When a Higher Than Normal Ratio of Long-Term Debt to Net

question 35

Multiple Choice

When a higher than normal ratio of long-term debt to net worth is coupled with a lower than average ratio of profits to total assets,the company

• A)is highly successful.
• B)is comparable with industry standards.
• C)has a high risk of financial failure.
• D)has a liquidity problem.

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Definitions:

Arbitration Hearing

A non-judicial proceeding where a neutral third party, the arbitrator, listens to the disputing parties' arguments and evidence to make a decision that can be binding or non-binding.

Decision Days

Specific days set by courts, especially the Supreme Court, to announce decisions or verdicts on cases they have heard.

Alternative Dispute Resolution

is a collective term for methods of resolving disputes outside the judicial process, such as arbitration or mediation.

Litigation

The process of taking legal action or resolving disputes in court; involves a plaintiff filing a lawsuit against a defendant to seek judgments or damages.