A High Debt Ratio Can Be Favorable Because Higher Leverage

question 41

True/False

A high debt ratio can be favorable because higher leverage may result in a higher return on equity.

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Definitions:

Organic Café

A café that serves food and drinks made with ingredients that are grown without synthetic pesticides, GMOs, or artificial fertilizers.

Insurable Interest

A legal requirement for purchasing insurance, indicating that the person buying the insurance must stand to suffer financial loss or hardship from the damage, loss, or destruction of the property insured, or from the death or injury of the person insured.

Insure Against Damage

The act of securing an insurance policy to protect against financial loss due to physical damage to property or goods.

Insurance

A contract by which the insurer promises to reimburse the insured or a beneficiary in the event that the insured is injured, dies, or sustains damage to property as a result of particular, stated contingencies.