Which of the following is/are true?
A)The more long-term debt in a firm's capital structure, the less the risk that the firm will experience difficulty making the required payments when due.
B)The more long-term debt in a firm's capital structure, the less is the risk of default or bankruptcy.
C)Financial analysts use the long-term debt ratio to assess risk related to long-term borrowing.
D)The debt-equity ratio relates short-term debt to shareholders' equity, indicating the relative mix of short-term financing obtained from lenders versus owners.
E)none of the above

Question

Quizplus · Accepted Answer

The long-term debt ratio is a measure of a company's financial leverage, and financial analysts use it to assess how much long-term debt the company has taken on relative to its equity. This ratio can help identify the level of risk related to the company's long-term borrowing. Choices A, B, and D are incorrect because they are either false or provide incorrect information.

Which of the Following Is/are True