Which of the Following Is an Accurate Statement Regarding a Company's

question 60

Multiple Choice

Which of the following is an accurate statement regarding a company's ability to meet its long-term debt obligations?

• A) If the debt-to-equity ratio is too high, it may indicate that the company has used up its borrowing capacity.
• B) If the debt-to-equity ratio is too high, it may mean that available leverage is not being used to the owners' benefit.
• C) The times interest earned ratio indicates if a company can make its principal and interest payments.
• D) The key ratios that are used to measure a long-term solvency are debt to equity, return on assets, and times interest earned.

Grasp the concept of slope in graphical analysis and its implication on economic variables.

Recognize the distinction between positive and normative economics.

Identify the characteristics and implications of economic growth.

Understand the common fallacies in economic reasoning.

---

Definitions:

Tension-Reduction

The process of relieving stress or emotional tension, often through specific actions or techniques.

Conciliation

Efforts made to ease tension, resolve disputes, or reconcile differences between conflicting parties.

Arbitration

A form of dispute resolution where an impartial third party makes a binding decision to resolve a conflict between two parties.

Neutral Third Party

An unbiased individual or entity that is not involved in a conflict or negotiation and can facilitate or mediate discussions.