Which of the following is true regarding the debt to equity ratio? a. The debt to equity ratio is a stringent measure of liquidity. b. The debt to equity ratio measures the productivity and desirability of the equity investment. c. The debt to equity ratio measures management’s ability to productively employ all its resources. d. The debt to equity ratio measures the capital structure of the entity. would D be the correct answer?

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
Problem 5MC: Calculate the projected debt ratio, debt-to-equity ratio, liabilities-to-assets ratio,...
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Which of the following is true regarding the debt to equity ratio?

a.

The debt to equity ratio is a stringent measure of liquidity.

b.

The debt to equity ratio measures the productivity and desirability of the equity investment.

c.

The debt to equity ratio measures management’s ability to productively employ all its resources.

d.

The debt to equity ratio measures the capital structure of the entity.

would D be the correct answer?

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