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14. A company that has a high debt ratio is (a) likely to have a lower (b) riskier (c) less risky than a company that
14. A company that has a high debt ratio is (a) likely to have a lower (b) riskier (c) less risky than a company that uses more equity f Return on Equity to stockholders in good economic times than a company that uses less debt interest expense on its income statement. (d) likely to have low 15. Which actions below would increase a company's liquidity rrent assets (a) more short-term investments comprising cu (b) more short-term debt financing rather than long-term (c) more money invested in merchandise inventory (d) more money invested in property, plant, and equipment assets. financing 16. Which ratio below compares the current value of a stock to its historical cost of the common equity on the Balance Sheet? (a) Price/Earnings ratio (b) Price/Book ratio (c) Equity/Assets ratio (d) Return on Equity ratio. 17. Which ratio below may indicate that the current value of the stock may be overpric if too high to a potential investor of the stock? (a) Price/Earnings ratio (b) Price/Dividend ratio (c) Equity/Assets ratio (d) Return on Equity ratio 18. What may be an advantage of borrowing long-term rather than short-term? (a) a lower interest rate (b) a higher interest rate (c) securing borrowed funds before the company's business activity declines (d) lower liquidity 19. The reason that lines of credit are often times more expensive than the quoted rate the line of credit is because of the requirement of a required (a) pledging (b) factoring (c) compensating balance (d) hedging 20. Which loan using inventory as collateral would i transportation costs? (a) floatingt
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