Trends in Ratios That Measure the Relationship Between Debt and Equity

question 38

Multiple Choice

Trends in ratios that measure the relationship between debt and equity provide information about which (if any) of the following?
I. Long term stability
II. Degree of risk in using debt financing
III. Margin of safety to creditors in the event of liquidation

• A) None.
• B) I and II only
• C) II and III only
• D) I, II and III

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