A Debt to Equity Ratio of 1

question 118

True/False

A debt to equity ratio of 1.0 means that half of the company's assets are financed by creditors.

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Definitions:

Constant Growth Period

The constant growth period refers to a phase in which a company or financial asset's dividends or earnings grow at a steady, unchanging rate.

Preemptive Right

Gives the current shareholders the right to purchase any new shares issued in proportion to their current holdings. The preemptive right enables current owners to maintain their proportionate share of ownership and control of the business.

Proxy Fight

An attempt to take over a company in which an outside group solicits existing shareholders’ proxies, which are authorizations to vote shares in a shareholders’ meeting, in an effort to overthrow management and take control of the business.

Dissident Shareholders

Shareholders who disagree with the company's management and policies, often expressing their dissatisfaction through votes against management proposals.