When a company has a financial leverage ratio (total assets/total equity) close to 1 to 1 (select
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Question:
When a company has a financial leverage ratio (total assets/total equity) close to 1 to 1 (select the best answer):
A/ The company is mainly using borrowings to finance its operations
B/ The return to shareholders is possibly lower than it would be if the leverage ratio was higher
C/ Banks would be more likely to give a loan to the company since the debt is low and the return to shareholders is possibly lower than it would be if the leverage ratio was higher
D/ Banks would be more likely to give a loan to the company since the debt is low
Expert Answer:
c Banks would be more likely to give a loan to the company since the debt is low and the return to s... View the full answer
Related Book For 
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Posted Date:
