If a Firm Has a Debt-Equity Ratio of

question 60

Multiple Choice

If a firm has a debt-equity ratio of .45, long-term debt of $500, and equity of $2,000, then:

• A) current liabilities must be $400.
• B) current assets must be $400.
• C) retained earnings must be $900.
• D)preferred stock must be $400.

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Definitions:

Higher Price

The strategy of setting the cost of a product or service above the average market price to signal higher quality or to cover higher production costs.

Market Segments

Market segments consist of individuals or entities grouped together based on shared traits or needs, which lead them to desire comparable products and services, reflecting similar preferences, attributes, or actions.

Broad Array

A wide range or selection of items or options available within a category or across different categories.

Differentiation Strategy

A business approach that involves making a product or service stand out from competitors by highlighting its unique qualities.