If a Company Is Financing More Assets with Debt Than

question 120

Multiple Choice

If a company is financing more assets with debt than with equity,the ________.

• A) debt to equity ratio will be more than 1
• B) debt to equity ratio will be between 0 to 1
• C) debt to equity ratio will be equal to 1
• D) debt to equity ratio will be negative

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Definitions:

Average Balance

A calculation used by financial institutions to determine the average amount of money in an account over a specific period, often used to calculate interest charges or eligibility for benefits.

Portfolio

A collection of investments held by an individual or institution.

Rate of Return

The upward or downward shift in an investment's value over a designated period, quantified as a percentage of its initial value.

Simple Average

A simple average is a statistical measure that calculates the mean of a set of numbers by adding them together and then dividing by the count of those numbers.