Question
If company A has a debt-to-total-assets ratio of 60% and company B has a debt-to-total-assets ratio of 55%, which of the following statements is true?
If company A has a debt-to-total-assets ratio of 60% and company B has a debt-to-total-assets ratio of 55%, which of the following statements is true?
one:
a. 60% of the assets of Company A are financed by creditors. If company A asked for more money at the bank, they would likely get it.
b. neither company A nor company B would likely be granted a loan because their debt-to-total-assets ratio is a little too high
c. 55% means that for every dollar of shareholders equity, the company has 55 cents of assets
d. 40% of the assets of Company A are financed by creditors. If company A asked for more money at the bank, they would likely get it.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started