Find the Debt-To-Value Ratio for a Firm with a Debt-To-Equity

question 21

Multiple Choice

Find the debt-to-value ratio for a firm with a debt-to-equity ratio of 3.

• A)3/4
• B)7/9
• C)4/5
• D)9/11
• E)5/6

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Definitions:

Bank Credit

The amount of credit available to a company or individual from a banking institution.

Short-Term Financing

Refers to the borrowing of funds for a period of less than one year to meet immediate financial needs.

Trust Receipts

Trust receipts are documents issued by banks to borrowers indicating that the bank holds the title to imported goods until the loan is repaid.

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.