Which of the Following Statements Is True of the Debt

question 123

Multiple Choice

Which of the following statements is true of the debt to equity ratio?

• A)The higher the debt to equity ratio, the lower the company's financial risk.
• B)The higher the debt to equity ratio, the greater the company's financial risk.
• C)If the debt to equity ratio is greater than 1, then the company is financing more assets with equity than with debt.
• D)If the debt to equity ratio is less than 1, then the company is financing more assets with debt than with equity.

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Definitions:

Top Management's Directives

Top Management's Directives are instructions or policies issued by the highest level of an organization's leadership, guiding the organization's goals, strategies, and actions.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without prior learning.

Artificial Response

A reaction or answer that is fabricated or not naturally occurring, often as a result of outside manipulation or prompting.

Classical Conditioning

An acquisition of knowledge method where an environmental trigger is connected to an innate stimulus.