Which of the Following Statements Is CORRECT

question 11

Multiple Choice

Which of the following statements is CORRECT?

• A) Increasing its use of financial leverage is one way to increase a firm's return on investors' capital (ROIC).
• B) If a firm lowered its fixed costs but increased its variable costs by just enough to hold total costs at the present level of sales constant,this would increase its operating leverage.
• C) The debt ratio that maximizes expected EPS generally exceeds the debt ratio that maximizes share price.
• D) If a company were to issue debt and use the money to repurchase common stock,this would reduce its return on investors' capital (ROIC).(Assume that the repurchase has no impact on the company's operating income. )
• E) If a change in the bankruptcy code made bankruptcy less costly to corporations,this would tend to reduce corporations' debt ratios.

---

Definitions:

Rational-Emotive Therapist

A type of therapist who uses rational emotive behavior therapy to help individuals confront and change irrational beliefs that cause emotional distress.

Internal Sentences

Concepts or thoughts formed within the mind that are not necessarily expressed verbally, often related to introspection and mental dialogue.

Cognitive Therapy

A type of psychological treatment that helps individuals challenge and change unhelpful cognitive distortions and behaviors, improve emotional regulation, and develop personal coping strategies.

Emotional Health

A state of well-being in which an individual realizes his or her own abilities, can cope with the normal stresses of life, can work productively, and is able to make a contribution to his or her community.