Question

A company with a high debt-to-equity ratio and low

Q: Answer-A company with a high debt-to-equity ratio and low interest coverage ratio is likely to face:

A high DE ratio implies more debt. If ICR is low, the company may struggle to service its interest, increasing risk of default, lowering credit rating, and deterring lenders.

interest coverage ratio is likely to face:

A Liquidity surplus

B Higher return on equity

C Financial distress and credit downgrades

D Reduced cost of capital

E Higher profit margin

Practice Next

More Previous year papers Questions

Solve the inequality:

(x − 1)/(x + 2) > 2.

Which of the following represents the solution set?

(A) x < −5

(B) −5 < x <...
If (6m – 5n) ² = 7 and 30mn = 60, then find the value of (6m + 5n) ² + 16mn.
Find the value of (21)³ + (- 12) ³ + ( - 9)³.
(408 × 680)÷(20% of 680) = (250 × 260)÷ 10 + ? – 4500
If (m + n + o) = 16 and (mn + no + om) = 80, then find the value of (m² + n² + o²).
If (a² + 1/a²) = 11, then find the value of (a³ - 1/a³).
Simplify:
6x + 8y - [(12x + 6y) - (4x + 3y) + 2y] - 4x
If x/y = 5/3, Find (x+y)/(x-y)?

A company with a high debt-to-equity ratio and low

Solution