Company a and Company B Have the Same Total Assets

question 21

Multiple Choice

Company A and Company B have the same total assets, operating income (EBIT) , tax rate, and business risk. Company A, however, has a much higher debt ratio than Company B. Company A's basic earning power (BEP) exceeds its cost of debt financing (rd) . Which of the following statements is most correct?

• A) Company A has a higher return on assets (ROA) than Company B.
• B) Company A has a higher times interest earned (TIE) ratio than Company B.
• C) Company A has a higher return on equity (ROE) than Company B, and its risk, as measured by the standard deviation of ROE, is also higher than Company B's.
• D) Statements b and c are correct.
• E) All of the statements above are correct.

Recognize appropriate actions to prevent the spread of diseases for patients under contact precautions.

Explain the chain of infection and its components to identify points of intervention.

Demonstrate an understanding of proper management of contaminated materials in a home care setting.

Assess the correct application of sterile techniques in a surgical setting.

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Definitions:

Reserve Ratio

The fraction of deposits that banks are required to hold in reserve and not lend out, aimed at controlling the money supply and banking stability.

M3

A measure of the money supply that includes M2 (cash, checking deposits, savings deposits, money market securities) plus large time deposits, institutional money market funds, and other large liquid assets.

Small Denomination

Currency or securities that are issued in relatively small monetary amounts, making them more accessible to individual investors or consumers.

Large Denomination

Large denomination refers to currency notes or financial instruments that represent a high value, typically making transactions and storage of large sums more convenient.