Which of These Are Alternative Measures of Gearing

question 12

Multiple Choice

Which of these are alternative measures of gearing?

• A)Total liabilities/total assets.
• B)Total liabilities/total owners' equity.
• C)Long-term liabilities/ total owners' equity.
• D)All are alternative measures of gearing.

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Definitions:

Declines to Declare Dividends

The decision by a company's board of directors not to distribute earnings to shareholders in the form of dividends.

Fundamental Change

A significant alteration in the operations, structure, or financial standing of a company that can affect its stakeholders.

Minority Shareholder

A minority shareholder is someone who owns less than 50% of a company's shares and therefore does not have a controlling interest in the company.

Preemptive Rights

Rights that allow existing shareholders the opportunity to buy new shares of a company's stock before it is offered to the public, often to maintain their percentage of ownership.