The Debt-Equity Ratio Is Measured as Total

question 11

Multiple Choice

The debt-equity ratio is measured as total:

• A) equity minus total debt.
• B) equity divided by total debt.
• C) debt divided by total equity.
• D) debt plus total equity.
• E) debt minus total assets, divided by total equity.

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Definitions:

Economies of Scale

The cost advantage achieved by an increase in production, leading to a reduction in the per unit cost.

Capital Facilities

Assets such as buildings, utilities, and major machinery which are essential for the production process in an organization or for providing services.

Laissez-faire Perspective

An economic philosophy advocating for minimal government intervention in the market, allowing individuals to act according to their own self-interests.

Monopoly Power

The exclusive control by one company over an entire industry or sector, allowing the company to manipulate market prices and conditions.