Which of the Following Criteria Would Be Determinants of the Appropriate

question 92

Multiple Choice

Which of the following criteria would be determinants of the appropriate ratio of debt to equity if a company should not take on more debt than can be serviced under conservative economic forecasts?
i.Maximisation of shareholder wealth
ii.Industry norms
iii.History of the ratio for the firm
iv.The stage of the current economic cycle
v.Limit imposed by lenders
vi.The company's capacity to service debt

• A) i, iii, v, vi
• B) ii, iii, v, vi
• C) ii, iii, iv, v
• D) iii, iv, v, vi

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Definitions:

Short Term Variations

Fluctuations that occur in economic variables over shorter timeframes, usually less than a year.

Regular Pattern

A consistent or predictable manner in which something occurs or is repeated over time.

Person's Life

The period from birth to death of an individual, encompassing all experiences, learning, and growth.

Gap Between Rich And Poor

A term describing the widening disparity in wealth and income between the wealthiest and the poorest segments of a population.