Debt Utilization Ratios Measure How Much Debt a Company Is

question 91

True/False

Debt utilization ratios measure how much debt a company is using relative to other sources of capital.

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Definitions:

Treasury Stock

Shares that were once outstanding and have been reacquired by the corporation, reducing the number of shares available on the open market.

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, often with set dividend payments.

Common Shares Outstanding

The total number of shares of common stock currently held by all shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.