A firm with a conservative financial leverage ratio has _____.
A)a lot of debt relative to assets
B)little debt relative to assets
C)no debt
D)high return on net worth

Question

Quizplus · Accepted Answer

A conservative financial leverage ratio means that the firm has little debt relative to its assets, as compared to a high financial leverage ratio where the firm has a lot of debt relative to its assets. The presence or absence of debt does not determine a conservative financial leverage ratio. A high return on net worth is not necessarily indicative of a conservative financial leverage ratio.

A Firm with a Conservative Financial Leverage Ratio Has _____