As the recession of 2007-2008 loomed over both large and small businesses, many firms looked for ways to deleverage. The term deleveraging implies that:
A) the firms avoided equity financing.
B) the firms borrowed money at lower interest rates.
C) the firms bought back their own stock to reduce the stock outstanding.
D) the firms replaced much of the debt in their capital structure with equity.

Question

Quizplus · Accepted Answer

Deleveraging refers to the process of reducing the level of debt in a firm's capital structure, often by replacing it with equity to lower financial risk.

As the Recession of 2007-2008 Loomed Over Both Large and Small