Which main criteria would be determinants of ratio of debt

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Problem 1: Prudent financial management would dictate that a company should not take on more debt than can be serviced, under pessimistic conditions, without jeopardy to the company's existence. Therefore, a proportion of total funding should be provided by equity participants. Which of the following main criteria would be determinants of the appropriate ratio of debt to equity?

I Limit imposed by lenders
II Norm in the industry
III History of the ratio for the firm
IV Company's capacity to service debt
V Maximisation of shareholder wealth

Select one:
a. I, II, III, IV
b. II, III, V
c. II, III, IV, V
d. III, IV, V

Reference no: EM132916571

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