Which of the Following Statements Is CORRECT

question 14

Multiple Choice

Which of the following statements is CORRECT?

• A) Increasing financial leverage is one way to increase a firm's basic earning power (BEP).
• B) If a firm lowered its fixed costs while increasing its variable costs, holding total costs at the present level of sales constant,
• This would decrease its operating leverage.
• C) The debt ratio that maximizes 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 action would have no impact on its basic earning power ratio. (Assume that the repurchase has no impact on the
• Company's operating income.)
• E) If changes in the bankruptcy code made bankruptcy less costly to corporations, this would likely reduce the average corporation's debt ratio.

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Definitions:

Aggression

Intentional injury or harm to another person.

Academic Performance

The level of achievement or success a student attains in their educational pursuits, often measured by grades or test scores.

Conduct Problems

Behavioral issues in children and adolescents that involve breaking societal rules, defying authority, and showing aggression towards others.

Poverty

A state of having insufficient financial resources to meet basic living needs such as food, shelter, and clothing.