If the Debt Ratio Is Too High,the Company May Be

question 156

True/False

If the debt ratio is too high,the company may be unable to pay its debts.

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Definitions:

Subordinated Debt

A class of debt that ranks below other debts with regard to claims on assets or earnings in the case of liquidation or bankruptcy.

Warrants

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a security (usually equity) at a certain price before expiration.

Federally Registered

Designation indicating that an entity or activity has been officially recorded or acknowledged by the federal government.

Capital

Financial assets or resources that individuals or organizations use to fund their operations and invest in their future growth.