Which Statement Regarding Debt Is NOT True

question 26

Multiple Choice

Which statement regarding debt is NOT true?

• A)A debt ratio of .50 means that debt finances half of the assets.
• B)The debt ratio measures the proportion of assets financed with debt.
• C)The higher the debt ratio, the lower the risk.
• D)The higher the debt ratio, the greater the pressure to pay interest and principal.

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