Question

ABC limited has debt equity ratio of 3: 1 where as xyz limited has debt equity ratio of 1 : 1. Name the advantage ABC Limited will have over xyz Limited when the rate of interest is lower than rate of return on investment of the company. *

Answer 1

Answer:

What is a good debt to assets ratio?

A lower debt-to-asset ratio suggests a stronger financial structure, just as a higher debt-to-asset ratio suggests higher risk. Generally, a ratio of 0.4 – 40 percent – or lower is considered a good debt ratio.

Answer 2

Answer:

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Explanation:

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