标题: Higher fin lev ratio is riskier? [打印本页] 作者: chunty 时间: 2011-7-13 15:43 标题: Higher fin lev ratio is riskier?
Pg 363 answer to 5 in cfai text is fsa book.
Company a has higher financial leverage ratio than b. Therefore A is riskier than b.
If A had a higher asset/ equity ratio than b then doesn't that mean it has less debt as a percentage of it's equity? I don't understand why having more assets to equity is riskier than less assets to equity.作者: chandsingh 时间: 2011-7-13 15:43
Higher assets = more liabilities compared to equity.
A = L + E
A / E = L
NO EXCUSES作者: busterbluth 时间: 2011-7-13 15:44
annnnnddd, thank you for making me feel like a schmuck...
