Which Statement Is True

question 17

Multiple Choice

Which statement is true?

• A)If the equity ratio is less than 50% then the entity is more reliant on equity funding than debt funding
• B)The debt ratio indicates how many dollars of debt exist per dollar of equity financing
• C)If the equity ratio is 50% the debt to equity ratio is 200%
• D)The sum of the debt ratio and the equity ratio equals 100%

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Definitions:

Grow

An increase in size, number, value, or strength over a period of time.

Borrowed

The act of receiving something of value in exchange for the promise of returning it or its equivalent.

Amount Owed

The total sum of money that is due or owed to another party.

Date

A particular day of a month or year, often specified by a number.