When deciding upon how much debt financing to employ,most practitioners would cite which of the following as the most important influence on the level of the debt ratio?
A) providing a borrowing reserve
B) maintaining desired bond rating
C) ability to adequately meet financing charges
D) exploiting advantages of financial leverage

Question

Quizplus · Accepted Answer

The ability to adequately meet financing charges is crucial when deciding on the level of debt financing because it directly impacts a company's solvency and its ability to continue operations without facing financial distress.

When Deciding Upon How Much Debt Financing to Employ,most Practitioners