In low-earning periods, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.
A) debt
B) liquidity
C) equity
D) cash
E) tax liability

Question

Quizplus · Accepted Answer

High levels of debt in the capital structure can lead to financial distress during low-earning periods, as the company may struggle to meet its debt obligations, thereby endangering stockholders' returns and the company's survival.

In Low-Earning Periods, Too Much ________ in the Capital Structure