Which of the Following Is/are Not True

question 37

Multiple Choice

Which of the following is/are not true?

• A)The more long-term debt in a firm's capital structure, the greater the risk that the firm will experience difficulty making the required payments when due.
• B)The more long-term debt in a firm's capital structure, the greater is the risk of default or bankruptcy.
• C)Financial analysts use the long-term debt ratio to assess risk related to long-term borrowing.
• D)The debt-equity ratio relates long-term debt to shareholders' equity, indicating the relative mix of long-term financing obtained from lenders versus owners.
• E)none of the above

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Definitions:

Deflation

A decrease in the general price level of goods and services in an economy over a period.

CPI

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.

Base Year

A specific year against which economic growth, prices, or other economic indicators are measured and compared.

Unemployment Benefits

Payments made by the government or a private insurance company to individuals who are unemployed and actively looking for a job.