A High Debt-To-Equity Ratio Will Always Be a Concern to Common

question 58

True/False

A high debt-to-equity ratio will always be a concern to common shareholders.

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Definitions:

Variable Resource

An input in production that can be adjusted in the short term to change the level of output.

Marginal Product

The additional output that is produced by using one more unit of a particular input, holding all other inputs constant.

Number of Workers

The total count of individuals employed or available for employment within a business or economy.

Law of Diminishing Returns

The principle that as one factor of production is increased while others are held constant, the incremental gains in output will eventually decrease.