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A Debt to Equity Ratio of 50% Indicates That

Question 25

Multiple Choice

A debt to equity ratio of 50% indicates that


A) half of the company's assets are financed through equity.
B) 50% of the company's interest expense comes from long-term debt financing.
C) the company is close to bankruptcy.
D) the company spends 50% of its operating earnings on interest.

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