Which of the Following Statements Is True Regarding Debt Ratios

question 100

Multiple Choice

Which of the following statements is true regarding debt ratios?

• A) Firms with relatively low debt ratios have higher expected returns when business is good.
• B) Firms with relatively low debt ratios are exposed to risk of loss when business is poor.
• C) Firms with relatively high debt ratios have higher expected returns when business is bad.
• D) Firms with relatively high debt ratios have higher expected returns when business is good.
• E) Firms with relatively low debt ratios have higher expected returns when business is poor.