Question $34$

In a common$-$size balance sheet, if long$-$term debt represents $40\%$ of total assets, what does

this suggest about the firm's financing structure?

$40\%$ of the firm's assets are financed by debt

$40\%$ of the firm's liabilities are cash

$40\%$ of the firm's assets are financed by equity

The firm is debt$-$free