Which of the Following Most Accurately Describes Operating Gearing

question 26

Multiple Choice

Which of the following most accurately describes operating gearing?

• A) It is concerned with the proportion of the annual income stream which is devoted to the prior claims of debt holders.
• B) It concerns the proportion of equity in the capital structure.
• C) It refers to the extent to which the firm's total costs are fixed.
• D) It concerns the proportion of debt in the capital structure.

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Definitions:

Comparative Negligence

A legal principle that reduces the plaintiff's damages based on their percentage of fault in an accident.

Strict Product Liability

A legal doctrine that holds sellers or manufacturers liable for defective products regardless of fault or intent, as long as the product was used as intended.

Manufacturer Actions

Refers to the measures or steps taken by a manufacturer in response to product design, production, marketing, and safety concerns.

Defective Condition

A state of imperfection or malfunction in a product that makes it hazardous or unfit for its intended use.