[amp_mcq option1=”Borrowing More” option2=”Issue of Debentures” option3=”Issue of Equity Shares” option4=”Redemption of Debt” correct=”option4″]<\/p>\n
The correct answer is: D. Redemption of Debt<\/strong><\/p>\n Debt to total assets ratio is a measure of a company’s financial leverage. It is calculated by dividing a company’s total debt by its total assets. A high debt to total assets ratio indicates that a company is using a lot of debt to finance its operations. This can be risky, as it means that the company is more likely to default on its loans if its business does not perform well.<\/p>\n There are a number of ways to improve a company’s debt to total assets ratio. One way is to redeem debt<\/strong>. This means paying off existing debt, which will reduce the amount of debt on the company’s balance sheet. Another way to improve a company’s debt to total assets ratio is to issue equity shares<\/strong>. This means selling new shares of stock, which will increase the amount of equity on the company’s balance sheet. Equity is a less risky form of financing than debt, as it does not have to be repaid.<\/p>\n Borrowing more money or issuing debentures will increase a company’s debt to total assets ratio, as it will increase the amount of debt on the company’s balance sheet. Therefore, these options are not correct.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Borrowing More” option2=”Issue of Debentures” option3=”Issue of Equity Shares” option4=”Redemption of Debt” correct=”option4″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-57405","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n