Over the Long-Term, Firms That Maintain a Constant Debt-Equity Ratio

question 17

Multiple Choice

Over the long-term, firms that maintain a constant debt-equity ratio over a variable business cycle may find that:

• A) debt has grown too large, too fast.
• B) it is difficult to maintain a stable dividend.
• C) retained earnings are unnecessary.
• D)they can grow at a rate in excess of the sustainable rate.

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Definitions:

Harry S Truman

The 33rd President of the United States, serving from 1945 to 1953, known for his leadership during the final stages of World War II and the early years of the Cold War.

Franklin Roosevelt

The 32nd President of the United States who led the country during the Great Depression and most of World War II, known for his New Deal domestic policies.

Foreign Policy

A government's strategy in dealing with other nations, involving diplomacy, economic measures, military action, and treaties to advance national interests.