When a Company Borrows More Money How Are the Debt

question 80

Multiple Choice

When a company borrows more money how are the debt to equity and return on equity affected assuming income before interest and taxes remain the same? Debt to Equity Return on Equity

• A)Increases Increases
• B)Decreases Decreases
• C)Decreases Increases
• D)Increases Decreases

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Definitions:

Disbursement Float

The time lag between a payment being made by a company and the actual withdrawal of funds from the company's account.