HD Corp and LD Corp

question 89

Multiple Choice

HD Corp. and LD Corp. have identical assets, sales, interest rates paid on their debt, tax rates, and EBIT. However, HD uses more debt than LD. Which of the following statements is CORRECT?

• A) Without more information, we cannot tell if HD or LD would have a higher or lower net income.
• B) HD would have the lower equity multiplier for use in the Du Pont equation.
• C) HD would have to pay more in income taxes.
• D) HD would have the lower net income as shown on the income statement.
• E) HD would have the higher net income as shown on the income statement.

---

Definitions:

Social Awareness

The ability to understand and respond to the needs of others in social situations, recognizing social cues and appropriately adapting behavior.

Self-Management

The ability to regulate one's own thoughts, feelings, and actions to achieve personal or professional goals.

Relationship Management

Relationship management is the strategy of maintaining beneficial relationships with business partners or customers to foster loyalty and long-term engagement.

Surface Acting

involves an individual displaying emotions that are not genuinely felt in order to meet external demands or occupational roles.