Which of the Following Is True of the Debt-To-Equity Ratio

question 50

Multiple Choice

Which of the following is true of the debt-to-equity ratio?

• A) It measures the relative risk that a business setback could cause bankruptcy.
• B) It is calculated using the formula: Total Liabilities/Total Assets.
• C) If the ratio is lower,it indicates lesser solvency.
• D) If the ratio is greater,it indicates increased business risk.

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