In the low earnings period, too much ______ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.
A) debt
B) liquid assets
C) equity
D) cash
E) tax

Question

Quizplus · Accepted Answer

In the low earnings period, too much debt in the capital structure can become a burden as the company may struggle to make interest payments and may default on loans, endangering stockholders' return and even the survival of the company. On the other hand, liquid assets, cash, equity, and tax are not directly related to the capital structure and may not have the same impact as too much debt.

In the Low Earnings Period, Too Much ______ in the Capital