INTRODUCTION TO ENTREPRENEURSHIP
IMPORTANCE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Declining.
|
|
|
Increasing.
|
|
|
Stable.
|
|
|
Fluctuating.
|
Detailed explanation-1: -A commercial banker considers a declining debt-to-equity ratio because it indicates an organization’s financial viability.
Detailed explanation-2: -In the banking and financial services sector, a relatively high D/E ratio is commonplace.
Detailed explanation-3: -Generally, a debt-equity ratio of 2.0 is considered to be a healthy ratio by analysts. Such a measure, where there is an equity instrument for every two debt instruments, is considered to be favorable.
Detailed explanation-4: -The major benefit of high debt-to-equity ratio is: A high-debt to equity ratio signifies that a firm can fulfil debt obligations through its cash flow and leverage it to increase equity returns and strategic growth.
Detailed explanation-5: -D/E ratio measures how much debt a company has taken on relative to the value of its assets net of liabilities.