Which of the Following Statements Is CORRECT

question 18

Multiple Choice

Which of the following statements is CORRECT?

• A) Other things held constant, the more debt a firm uses, the higher its operating margin will be.
• B) Debt management ratios show the extent to which a firm's managers are attempting to magnify returns on owners' capital through the use of financial leverage.
• C) Other things held constant, the more debt a firm uses, the higher its profit margin will be.
• D) Other things held constant, the higher a firm's debt ratio, the higher its TIE ratio will be.
• E) Debt management ratios show the extent to which a firm's managers are attempting to reduce risk through the use of financial leverage. The higher the debt ratio, the lower the risk.

---

Definitions:

Homosexual Orientation

A romantic or sexual interest in people of the same gender.

Genetics

The study of heredity and the variation of inherited characteristics.

Homosexual Relatives

Family members who are attracted to individuals of the same sex, pointing towards genetic or environmental influences on sexual orientation.

Environmental Conditions

Environmental conditions refer to the various physical and biological factors that influence the living conditions and habitats of organisms, including climate, terrain, and natural resources.