Economics · Ratio Analysis
What does a low debt-to-equity ratio typically suggest about a company?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The company is overly reliant on debt financing.
- 2The company relies more on equity financing and has lower financial leverage risk.✓
- 3The company is at a very high risk of immediate insolvency.
- 4The company's interest coverage ratio is critically low.
Correct answer
The company relies more on equity financing and has lower financial leverage risk.
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