When compared with a debt-to-assets ratio

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Reference no: EM13129125

Revel Company has average daily sales of $5,000, 90% of which are on credit. Receivables are collected 28 days after sales, on average. What is Revel's average accounts receivable balance?

a $ 4,500
b $ 5,000
c $126,000
d $140,000

Why is equity capital generally more expensive than debt financing?

a. Dividends fluctuate more than interest rates.
b. Interest on bonds is a legal obligation.
c. Investors expect to be paid more for exposure to higher risk.
d. Investors have a greater demand for equity investments than for debt investments.

When compared with a debt-to-assets ratio, a debt-to-equity ratio is

A. Unrelated to the debt-to-assets ratio.
B. About the same as the debt-to-assets ratio.
C. Lower than the debt-to-assets ratio.
D. Higher than the debt-to-assets ratio.

Reference no: EM13129125

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