Which of the following is most likely to occur if a firm's equity does not grow as fast as its assets in the long run?
A)Long-term debt will increase
B)Current liabilities will be reduced
C)Dividend-payout ratio will increase
D)Profit margin will decrease

Question

Quizplus · Accepted Answer

If a firm's equity does not grow as fast as its assets in the long run, it means that the firm is relying more on debt to finance its growth. As a result, the long-term debt will increase.

Which of the Following Is Most Likely to Occur If