Answer all the questions below. You will need to do an internet search to assist with some of your answers; please state your sources. 1. According to the survey results shown above, what is the most common measure of leverage among CFOs? 2. State the formula for this measure. 3. State what levels are considered high or low.

Figure 13. How do companies measure leverage? This figure displays CFO responses to the following question: When you consider the appropriate amount of debt for your firm (optimal capital structure), what are the primary metrics your company uses? (rank your top 3) The blue bottom bars display results for the primary choice. The orange middle (gray top) bars display results for the secondary (tertiary) choices, respectively. The results are presented conditional on firm size. Large firms have annual revenue greater than $1 billion, and small firms have annual revenue less than $1 billion. For example, 49% of CFOs from large firms indicate that their primary measure of capital structure is debt/EBITDA (and 74% say that it is one of their top three debt measures)