If a Company Increases Its Debt Ratio, but Leaves Its

question 100

Multiple Choice

If a company increases its debt ratio, but leaves its operating income (EBIT) and total assets unchanged, which of the following is most likely to occur:

• A) The company's tax liability will fall.
• B) The company's net income will rise.
• C) The company's basic earning power will fall.
• D) Answers a and b are correct.
• E) None of the answers above is correct.

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Definitions:

Sophisticated Hunting

Advanced and often cooperative methods of predation that involve complex strategies, techniques, and sometimes tools, to capture or kill prey.

Butchered Bones

Animal remains that show evidence of having been cut, chopped, or broken by humans, typically for consumption or tool use.

Brain Shape

The form or morphology of the brain, which can influence cognitive abilities and behavior in various organisms.

Cognitive Ability

Refers to the capacity of the brain to process information, reason, remember, and relate objects and symbols to engage in abstract thinking and problem-solving.