Which of the Following Statements Is TRUE of the Debt

question 206

Multiple Choice

Which of the following statements is TRUE of the debt to equity ratio?

• A) The higher the debt to equity ratio, the lower the company's financial risk.
• B) The higher the debt to equity ratio, the greater the company's financial risk.
• C) If the debt to equity ratio is greater than 1, the company is financing more assets with equity than with debt.
• D) If the debt to equity ratio is less than 1, the company is financing more assets with debt than with equity.

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Definitions:

Shorter

Having lesser length, height, or duration than something else or than is typical.

Amplitude

In physics, it refers to the maximum extent of a vibration or oscillation, measured from the position of equilibrium.

Brightness

The perception of light intensity, often described in terms of the amount of light emitted or reflected by an object.

Colour

The characteristic of visual perception described through categories with names such as red, blue, yellow, etc., primarily caused by the spectrum of light interacting with the photoreceptor cells of the eye.