Which of the Following Statements Is CORRECT

question 10

Multiple Choice

Which of the following statements is CORRECT?

• A) Generally, debt-to-total-assets ratios do not vary much among different industries, although they do vary among firms within a
• Given industry.
• B) Electric utilities generally have very high common equity ratios because their revenues are more volatile than those of firms in
• Most other industries.
• C) Drug companies (prescription, not illegal!) generally have high debt-to-equity ratios because their earnings are very stable and, thus, they can cover the high interest costs associated with high
• Debt levels.
• D) Wide variations in capital structures exist both between industries and among individual firms within given industries. These differences are caused by differing business risks and also
• Managerial attitudes.
• E) Since most stocks sell at or very close to their book values, book value capital structures are almost always adequate for use in
• Estimating firms' costs of capital.

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Definitions:

Fundamentalism

A strict adherence to specific theological doctrines typically in a reaction against what are perceived as modernist theories and practices.

Tylor's Theory

A concept in anthropology proposed by Edward Burnett Tylor suggesting that cultures evolve from primitive to complex forms.

Religious Evolution

Religious evolution refers to the theory or observation that religious beliefs and institutions develop and change over time, adapting to societal and cultural shifts.

Relevant Today

Still applicable or significant in the current time.