Ask Question
19 December, 08:35

The debt-to-equity ratio:A. Is calculated by dividing book value of secured liabilities by book value of pledged assets. B. Is a means of assessing the risk of a company's financing structure. C. Is not relevant to secured creditors. D. Can always be calculated from information provided in a company's income statement. E. Must be calculated from the market values of assets and liabilities.

+3
Answers (1)
  1. 19 December, 10:42
    0
    The debt-to-equity ratio is a means of assessing the risk of a company's financing structure.

    The correct answer is B

    Explanation:

    The division of book value of secured liabilities by book value of pledged assets is referred to as debt ratio.

    Debt-equity ratio is calculated by dividing the book value of debt by book value of total stockholders equity. It measures the extent to which a firm is exposed to financial risk.

    Debt-to-equity ratio is relevant to secured creditors because it shows the ability of a firm in repaying its debt obligations.

    Debt-to-equity ratio cannot be calculated from the information provided in a company's income statement.

    Debt-to-equity ratio is not calculated from the market values of assets and liabilities.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The debt-to-equity ratio:A. Is calculated by dividing book value of secured liabilities by book value of pledged assets. B. Is a means of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers