Finance Test - Part 2

we have taught Leverage Ratio Analysis. It is from finance subject. So, today, as the student of finance, it is your duty to give us the test.

If you did not read and understand it, read our this written lecture at here. Now, ready to answers the following questions on your blank page.

Remember : There are lots of other Leverage topics in accounting education. For better understanding, you can just search by using search box of accounting education. 

Question 1. Will you choose high debt-equity ratio if rate of interest on debt is higher  than rate of return on investment?

(a) Yes (b) No

Question 2.  Will you choose high debt-equity ratio if rate of return on investment is higher  than rate of interest on loan?

(a) Yes (b) No

Question 3. Will you choose Low leverage ratio if rate of interest on debt is higher  than rate of return on investment?

(a) Yes (b) No

Question 4.  Will you choose Low leverage ratio if rate of return on investment is higher  than rate of interest on loan?

(a) Yes (b) No

Question 5. Is Equity / Debt the correct formula of leverage ratio?

(a) Yes (b) No

You can match your given answers with correct answers at   here. 

Question 1.

Answer: no

Question 2.

Answer :  yes

Question 3.

Answer :  yes

Question 4.

Answer :  no

Question 5.

Answer :  no