Most Companies Use a Combination of Debt and Equity to Obtain

question 68

Essay

Most companies use a combination of debt and equity to obtain the assets needed to fund their operations.Two leverage ratios are the debt ratio and the debt-to-equity ratio.What do each of these measures,and how are they each calculated?

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Definitions:

Taxation

The process by which governments charge fees on individuals and corporations to fund public expenditures.

Public Interest

A common concern among citizens in the welfare and protection of the community and its members.

Elected Officials

Elected officials are individuals chosen through the electoral process to hold public office in government bodies at various levels, responsible for legislating, making decisions, and representing the interests of the citizenry.

Natural Monopolies

Industries where a single firm can supply a product or service to an entire market at a lower cost than what would be possible if there were multiple firms.