At LOW levels of leverage, what can be said of equity versus debt levels?
A) Equity can be either high or low relative to debt
B) Equity will be low relative to debt
C) Equity will be high relative to debt

Question

Quizplus · Accepted Answer

At low levels of leverage, the company would rely less on debt financing and more on its own equity financing. Therefore, the equity level would be high relative to debt.

At LOW Levels of Leverage, What Can Be Said of Equity