Question

Which of the following firms tend to have high debt ratios? A. Startup firms B. near-bankrupt...

Which of the following firms tend to have high debt ratios?

A. Startup firms

B. near-bankrupt firms

C. AA-rated firms

D. financial service firms

- C&D

-A&B

-C

-A,B,and D

-A,B,C,D

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

As per details given inn the question-
Correct Answer is option D-
Firms tends to have high debt ratio -

  1. Startup Firms- They have more liability as compared to Assets, because they are just build up and make the names in the market.
  2. Near bankrupt firm - Firms are near end to bankcrupt have more liability than the assets
  3. Financial services firms- These use more debt
  4. AA rated firms are having high Total assets as compared to liabilty

Debt ratio = Total Liabilities / Total Assets

I hope this clear your doubt.

Feel free to comment if you still have any query or need something else. I'll help asap.

Do give a thumbs up if you find this helpful.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
firms whose assets are relatively low bankrupt cost, hence they tend to use relatively more debt....
firms whose assets are relatively low bankrupt cost, hence they tend to use relatively more debt. true or false firms whose asset are relative liquid tend to have relatively low bankruptcy costs, hence they temd to use relatively more debt
The optimal capital structure will tend to include more debt for firms with A. less taxable...
The optimal capital structure will tend to include more debt for firms with A. less taxable income. B. lower probability of financial distress. C. substantial tax shields from other sources. D. the lowest marginal tax rate. E. the highest depreciation deductions.
Which of the following leverage/coverage ratios does not have a benchmark?                         a.    Interest coverage
Which of the following leverage/coverage ratios does not have a benchmark?                         a.    Interest coverage                         b.    Debt-to-equity                         c.    Debt-to-EBITDA                         d.    Debt-to-total capital  
11.Which of the following statements about analysts’ earnings forecasts is correct? Analysts’ long-term forecasts tend to...
11.Which of the following statements about analysts’ earnings forecasts is correct? Analysts’ long-term forecasts tend to be too: a) high, whereas their near-term forecasts tend to be too low. b) high, and their near-term forecasts also tend to be too high. c) low, whereas their near-term forecasts tend to be too high. d) low, and their near-term forecasts also tend to be too low. 8. Market timers attempt to earn abnormal returns by: a) adjusting the ratio of aggressive equity...
Generally, low-leveraged industries have low coverage ratios, whereas capital-intensive industries that are heavily financed with debt...
Generally, low-leveraged industries have low coverage ratios, whereas capital-intensive industries that are heavily financed with debt have high coverage ratios. True or false? Other things held constant, the higher a firm's financial leverage, the higher its business risk. True or false? Interest is a tax deductible expense, and deductions are most valuable to firms with high tax rates. Therefore, the higher a firm's tax rate, the greater the advantage of debt. True or false?
"Consider a firm with EBIT of $3M and $10M of debt. Given the following data for...
"Consider a firm with EBIT of $3M and $10M of debt. Given the following data for rated firms in the same industry, what should be the rating of this firm? " Rating AAA AA A BBB Interest rate 4% 5% 6% 7% EBIT coverage 8 6 4 3 A. AA B. BBB C. AAA D. less than BBB E. A
Which of the following types of firms do you expect to have particularly high or low...
Which of the following types of firms do you expect to have particularly high or low asset turnover? Explain why. a. Supermarket b. Pharmaceutical company c. Jewellery retailer d. Software company
Which of the following is NOT generally true about high seniority legislators? they tend to be...
Which of the following is NOT generally true about high seniority legislators? they tend to be committee chairs they tend to be more responsive to their constituents they tend to come from "safe" districts they tend to have significant expertise
Which of the following firms would be LESS likely to use more debt? a.   A firm...
Which of the following firms would be LESS likely to use more debt? a.   A firm owns many buildings and real estates. b.   A firm has stable taxable income. c.   A firm has large agency costs of equity. A firm has used up all other tax saving strategies. e.   A firm has low-rated (B- rating or below) bonds.
All of the following are financial leverage ratios except the A. current ratio. B. cash coverage...
All of the following are financial leverage ratios except the A. current ratio. B. cash coverage ratio. C. total debt ratio. D. times interest earned ratio. E. equity multiplier.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT