All other things the same, if long-term debt is exchanged for short-term debt, the debt-to-equity ratio will be unchanged.

Question

Quizplus · Accepted Answer

The debt-to-equity ratio is a measure of a company's financial leverage, calculated by dividing total debt by total equity. If the amount of debt stays the same but the maturity of the debt is shortened, it does not change the total amount of debt, and therefore does not affect the debt-to-equity ratio.

All Other Things the Same, If Long-Term Debt Is Exchanged