Which of the Following Statements About the Debt-To-Equity Ratio Is

question 19

Multiple Choice

Which of the following statements about the debt-to-equity ratio is NOT true?

• A) A high ratio indicates that the company is highly geared.
• B) From a creditor's point of view,a higher measure is desirable.
• C) The debt-to-equity ratio indicates the proportion of borrowing to owners' investment.
• D) The debt-to-equity ratio shows the degree of risk borne by the creditors vis-à-vis the shareholders.