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High degree of financial leverage means
Oa High debt proportion
Ob Lower dobt proportion
O. C.Equal debt and equity.
Od. No debt
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- When analyzing a companys debt to equity ratio, lithe ratio has a value that is greater than one, then the company has: a. equal amounts of debt and equity. c. less debt than equity. b. more debt than equity. d. none of these.Leverage implies that a company a. contains debt financing b. contains equity financing c. has a high current ratio d. has a high earnings per shareWhat is Debt to equity ratio of JFC? Note: please don’t use excel and show your solution.
- The return which the debt holders get is called Select one: a. Profit b. Dividend c. Earnings d. Interest e. Cost f. NoneThe debt to equity ratio is a: Group of answer choices A)Liquidity ratio. b)Solvency ratio. c)Profitability ratio. d)Market indicator ratio. e)None of the aboveBetween equity and debt capital a. Debt is safer than equity b. Equity is riskier than debt c. Both debt and equity are equally risky d. No option is correct
- NPAT Less prefernce dividend is used in O a. Return on Equity O b. Return on Equity share capital О с. Return on Capital Employed O d. Debt service ratioWhich of the following is not a potential source of financial leverage? Group of answer choices Accounts payable. Long-term debt. Interest payable. Common stock.Compared to junior unsecured debt, subordinated debt exhibits __________ credit risk, __________ yield, and __________ recovery rate. A. lower / lower / higher B. higher / higher / lower C. higher / lower / lower D. lower / higher / lower
- Financial leverage measures how much earnings per share (and ROE) respond to changes in debt. True or FalseWhich of the following statements are true about the interest-burden ratio? Check all that apply: It can be expressed as EBIT/Interest Expense. If the company has no financial leverage, the interest-burden ratio will be equal to 0. A company with higher financial leverage will have a lower interest-burden ratio. If the company has no financial leverage, the interest-burden ratio will be equal to 1. It can be expressed as Net profits/Pretax profits.What is the most obvious difference between debt and equity financing? a. Principal and interest must be repaid for debt financing. b. Dividend payments are mandatory. c. Debt financing can result in loss of control. d. Equity financing is revenue and thus taxable