Which of the Following Statements Is True of the Debt

question 50

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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