The Probability of Incurring Bankruptcy Increases as a Firm's Debt/equity

question 71

True/False

The probability of incurring bankruptcy increases as a firm's debt/equity ratio decreases. 

---

Definitions:

Co-Insurance

An insurance policy feature where the insured party and the insurer share the covered losses in a defined proportion.

Insured

The individual or entity covered by an insurance policy, which provides protection against loss or damage.

Insurer

An entity that provides insurance coverage, assuming the risk of loss from an insured party in exchange for premiums paid.

Brokers

Intermediaries that arrange transactions between buyers and sellers for a commission.