Other things being equal,the higher the debt to equity ratio,the higher the risk of bankruptcy.

Question

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Higher debt to equity ratio means a company has taken on more debt compared to its equity. This increases the financial risk of the company as they have to pay interest payments and principal repayments, increasing their financial obligations. In times of economic downturns or financial hardships, the company may not be able to meet these obligations, increasing the risk of bankruptcy.

Other Things Being Equal,the Higher the Debt to Equity Ratio,the