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german
2 years ago
15

What should be the ideal debt-equity ratio of an organization?

Advanced Placement (AP)
1 answer:
FrozenT [24]2 years ago
8 0

Answer:

The debt-to-equity ratio should be between 1 and 1.5. However, because some sectors use more debt financing than others, the appropriate debt to equity ratio will vary by industry. Capital-intensive industries, such as finance and manufacturing, sometimes have higher ratios of more than 2.

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