A firm is most likely to structure a lease as an operating lease rather than a capital lease, when it:（）
A: has a high debt-to-equity ratio.
B: is very profitable.
C: does not have debt covenants.
A: has a high debt-to-equity ratio.
B: is very profitable.
C: does not have debt covenants.
举一反三
- Which of the following statements best compares long-term borrowing capacity ratios? A: The debt/equity ratio is more conservative than the debt ratio. B: The debt ratio is more conservative than the debt/equity ratio. C: The debt/equity ratio is more conservative than the debt to tangible net worth ratio. D: The debt to tangible net worth ratio is more conservative than the debt/equity ratio.
- A low debt ratio is safer than a high debt ratio.
- If a firm has a debt to owners' equity ratio of .75 (or 75%) we can conclude that A: it has relied more on debt than equity to finance its operations. B: the firm is likely to have trouble paying its short-term debts when they come due. C: its total liabilities are less than its owners' equity. D: the firm has expenses that are exactly 75% of its gross profit.
- One difference between a financial lease and operating lease is that：（ ） A: there is an often a call option in a financial lease. B: there is often an option to buy in an operating lease. C: an operating lease is often cancellable by the lessee. D: a financial lease is often cancellable by the lessee.
- The average of a firm's cost of equity and after tax cost of debt that is weighted based on the firm's capital structure is called the: A: reward to risk ratio B: weighted capital gains rate C: structured cost of capital D: weighted average cost of capital