Which of the following statements is TRUE?
A)The lower a firm's debt-to-equity ratio,the LESS room it has to take on additional debt.
B)More stable industries,such as utilities,tend to have LOWER debt-to-equity ratios.
C)Leverage ratios focus on INCOME STATEMENT items.
D)There is NO GENERAL BENCHMARK FOR LEVERAGE RATIOS,and ideal values vary from industry to industry.

Question

Quizplus · Accepted Answer

Leverage ratios, including the debt-to-equity ratio, vary significantly across different industries due to varying capital structures and risk levels. There is no one-size-fits-all benchmark, making statement D true.

Which of the Following Statements Is TRUE