An Important Consequence of Financial Deepening Is ________

question 9

Multiple Choice

An important consequence of financial deepening is ________.

• A)an increase in the number of new firms
• B)a sharp increase in levels of saving & investment
• C)higher profit rates
• D)an expansion of bank loans relative to other funding sources

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Definitions:

Debt/Equity Ratio

A calculation that shows how much a company relies on borrowed funds, found by dividing the sum of its liabilities by the equity owned by shareholders.

Long-term Debt Ratio

A financial ratio that shows the proportion of a company’s long-term debt compared to its total assets.

Total Debt

Refers to the sum of all financial obligations (short-term and long-term liabilities) owed by an individual or entity.

Net Cash

The amount of cash that is available after all debts, expenses, and operational costs have been deducted.