Which of the Following Statements Is FALSE

question 93

Multiple Choice

Which of the following statements is FALSE?

• A)If there is uncertainty regarding EBIT,then with a higher interest expense there is a greater risk that interest will exceed EBIT.
• B)Even for a firm with positive earnings,growth will affect the optimal leverage ratio.
• C)From a tax perspective,the firm's optimal level of debt is proportional to its current earnings.
• D)The optimal proportion of debt in the firm's capital structure will be higher,the higher the firm's growth rate.

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Definitions:

Squeeze-Release

A technique or process involving the application and subsequent release of pressure, often used in physical examinations or material testing.

Peter Salem

An African American patriot who served as a soldier during the American Revolutionary War, notably at the Battle of Bunker Hill.

Salem Poor

An African American Patriot who distinguished himself during the American Revolutionary War.

Battle of Bunker Hill

A significant early battle of the American Revolutionary War, fought near Boston in 1775, known for the high British casualties and the famous order, "Don't fire until you see the whites of their eyes."