Heidee Corp

question 92

Multiple Choice

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

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

---

Definitions:

Digital Cash

Money stored electronically and used in place of physical currency.

Electronic Funds

Money that is moved electronically from one bank account to another.

Microchips

Small, integrated circuits embedded in various devices to provide control, processing, or memory capabilities.

Electronic Fund Transfer Act

A law that protects consumers when they transfer funds electronically, including ATMs, debit cards, and direct deposits.