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Suppose that you took out a $1,000 loan in January and had to pay $75 in annual interest. During the year, inflation was 6 percent. Which of the following statements is CORRECT?
Debt Ratio
A financial ratio that measures the extent of a company's leverage, indicating the proportion of its assets that are financed with debt.
Liabilities
Financial obligations or debts that a company owes to others, due for payment in the future.
Company's Risk
The exposure to potential financial losses or operational failures that a company faces.
Stockholders' Equity
The residual interest in the assets of a corporation after deducting its liabilities, representing ownership interest.
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