A common leverage ratio is for a company to have at least ________ times the amount of equity as it has debt
A) two
B) three
C) four
D) five
E) ten
A
Explanation: A) It can be risky to take on too much debt, so lenders consider how much debt a company has relative to the amount of equity (or assets) a company owns before they issue a loan. A common leverage ratio is for a company to have at least twice the amount of equity as it has debt.
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