Firms U and L Each Have the Same Amount of Assets,investor-Supplied

question 32

Multiple Choice

Firms U and L each have the same amount of assets,investor-supplied capital,and both have a return on investors' capital (ROIC) of 12%.Firm U is unleveraged,i.e. ,it is 100% equity financed,while Firm L is financed with 50% debt and 50% equity.Firm L's debt has an after-tax cost of 8%.Both firms have positive net income and a 35% tax rate.Which of the following statements is CORRECT?

• A) The two companies have the same times interest earned (TIE)ratio.
• B) Firm L has a lower ROA than Firm U.
• C) Firm L has a lower ROE than Firm U.
• D) Firm L has the higher times interest earned (TIE)ratio.
• E) Firm L has a higher EBIT than Firm U.

Appreciate the importance of aligning personal beliefs with professional standards.

Identify and describe characteristics of good intercultural communication skills.

Understand the concept of cultural biases and their impact on communication.

Demonstrate knowledge of the distinctions between high-context and low-context cultures in communication.

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Definitions:

Employee Assistance Program

Workplace-initiated programs that provide confidential resources and support to employees dealing with personal or work-related issues.

Air Traffic Controller

A professional responsible for directing aircraft safely in the sky and on the ground at airports, ensuring the orderly and efficient flow of air traffic.

Managed Care Programs

Healthcare systems designed to optimize patient care, utilization of services, and minimize costs through predetermined networks and coverage limits.

Mental Disorders

A wide range of conditions affecting mood, thinking, and behavior, impacting an individual's ability to function.