Using the Debt to Equity Ratio,which of the Following Franchises

question 52

Multiple Choice

Using the debt to equity ratio,which of the following franchises would be assessed as having the riskiest financing structure?
$$\begin{array} { | l | c | c | c | c | c | } \hline & \text { Franchise } & \text { Franchise } & \text { Franchise } & \text { Franchise } & \text { Franchise } \\& \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Total liabilities } & \$ 240,000 & \$ 120,000 & \$ 300,000 & \$ 500,000 & \$ 270,000 \\\hline \text { Total equity } & \$ 60,000 & \$ 20,000 & \$ 150,000 & \$ 100,000 & \$ 9 0 , 0 0 0 \\\hline\end{array}$$

• A) Franchise A
• B) Franchise B
• C) Franchise C
• D) Franchise D
• E) Franchise E

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Definitions:

Inspirational Appeals

A strategy employed to motivate individuals by appealing to their emotions, aspirations, or values in order to inspire action.

Ingratiation

A psychological technique used to influence others through flattery or other forms of manipulation to make oneself more likable or acceptable.

Personal Appeals

Personal appeals refer to requests or arguments made on the basis of personal relationships or loyalties, often used to influence decision-making or persuade others.

Exchange

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