Question
Which of the following statements is true of the debt to equity ratio? If the debt to equity ratio is less than 1, then the
Which of the following statements is true of the debt to equity ratio?
If the debt to equity ratio is less than 1, then the company is financing more assets with debt than with equity.
The higher the debt to equity ratio, the greater the companys financial risk.
The higher the debt to equity ratio, the lower the companys financial risk.
If the debt to equity ratio is greater than 1, then the company is financing more assets with equity than with debt.
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Managerial Accounting
Authors: Wendy M. Tietz, Louis Beaubien, Karen W. Braun
3rd Canadian edition
