Which of the Following Statements Is CORRECT

question 51

Multiple Choice

Which of the following statements is CORRECT?

• A)Increasing financial leverage is one way to increase a firm's basic earning power (BEP).
• B)If a firm lowered its fixed costs while increasing its variable costs, holding total costs at the present level of sales constant, this would decrease its operating leverage.
• C)The debt ratio that maximizes EPS generally exceeds the debt ratio that maximizes share price.
• D)If a company were to issue debt and use the money to repurchase common stock, this action would have no impact on its basic earning power ratio.(Assume that the repurchase has no impact on the company's operating income.)
• E)If changes in the bankruptcy code made bankruptcy less costly to corporations, this would likely reduce the average corporation's debt ratio.

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AIDS

Acquired Immune Deficiency Syndrome, a critical illness triggered by the human immunodeficiency virus (HIV) that drastically impairs the immune system.

Marijuana

A mind-altering substance derived from the Cannabis plant, utilized for either therapeutic or leisure activities.

Psychoactive Drugs

Substances that, when taken, alter perception, mood, consciousness, cognition, or behavior by affecting the brain's neurochemistry.

Pleasant Effects

Experiences or outcomes that are enjoyable or produce a sense of satisfaction and well-being.