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2. An equity analyst developing a screen tool to exclude potentially weak companies would most likely accept companies with: A. Negative net income. B. A debt-to equity ratio above some cutoff point. C. A debt-to-total assets ratio below some cutoff point.

Ans: C. A debt-to-equity assets ratio below some cutoff point as a screening tool would exclude companies that are financially weak and have excessive debt in their capital structure. The other choices would potentially include weak companies rather than exclude them.