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Basic Question 5 of 6
True or False? The lower the debt to equity ratio, the riskier the situation.
User Contributed Comments 4
| User | Comment |
|---|---|
| johntan1979 | Is this implying that non-public companies are "high risk" investments, since they are 100% debt-financed? |
| Seancfa1 | You can have equity in a privately held firm. |
| ldfrench | Take a look at Lehman Brothers and Bear Stearns D/E in 2007-2008 |
| houstcarr | non-public companies definitely are not 100% debt financed |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
calculate and interpret activity, liquidity, solvency, and profitability ratios
describe relationships among ratios and evaluate a company using ratio analysis
CFA® 2024 Level I Curriculum, Volume 3, Module 11.