Which of the Following Statements Is Correct

question 24

Multiple Choice

Which of the following statements is correct?

• A) The use of debt in the capital structure results in tax benefits to the firm.
• B) Debt is referred to as "financial leverage" because it magnifies returns to shareholders.
• C) Debt management ratios evaluate whether a firm is financing its assets with a reasonable amount of debt versus equity financing.
• D) All of these choices are correct.

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