Charm City Electric Is a Regulated Monopoly Providing Electric Services

question 18

Multiple Choice

Charm City Electric is a regulated monopoly providing electric services in a large city.Property, plant, and equipment dominate the asset side of the balance sheet.Which of the following is/are true?

• A)It relies more on long-term debt than shareholders' equity to finance these facilities.
• B)It may a debt-equity ratio of 100% or more.
• C)The regulated monopoly status practically eliminates the risk of default or bankruptcy, so Charm City Electric faces a relatively low borrowing cost.
• D)Charm City Electric's production and transmission facilities can serve as collateral for the long-term.
• E)all of the above

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