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Two small businesses have applied for a $50,000 long-term loan from their local bank. The first company, Pam's Pottery, has a debt to assets ratio
Two small businesses have applied for a $50,000 long-term loan from their local bank. The first company, Pam's Pottery, has a debt to assets ratio of 33% and a payout ratio of 42%. The second company, Bob's Boutique, has a debt to assets ratio of 42% and a payout ratio of 33%. Which business is more likely to receive a loan and why? Bob's Boutique, because it has a lower payout ratio O Pam's Pottery, because it has a higher payout ratio Pam's Pottery, because it has a lower debt to assets ratio O Bob's Boutique, because it has a higher debt to assets ratio
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