Under Which One of the Following Capital Structures Will a Firm's

question 83

Multiple Choice

Under which one of the following capital structures will a firm's internal growth rate exceed its sustainable growth rate?

• A) Total debt-to-asset ratio equals 35%.
• B) Equity-to-debt ratio equals 60%.
• C) Equity-to-debt ratio equals 125%.
• D)None of these.

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Definitions:

Implied Ratification

The tacit approval or agreement to the terms of a contract or action not originally authorized, indicated by actions that suggest acceptance.

Age of Majority

The legally defined age at which an individual is considered an adult and capable of making decisions and accepting responsibilities for their actions.

Disaffirmance

The legal right of a party to renounce or void a contract, often used in the context of minors voiding contracts they've entered.

Mentally Incapacitated Persons

Individuals who are unable to make informed decisions due to mental impairments or conditions.