Which of the Following Is Correct

question 47

Multiple Choice

Which of the following is correct?

• A) Generally, debt to total assets ratios do not vary much among different industries although they do vary for firms within a particular industry.
• B) Utilities generally have very high ordinary equity ratios due to their need for vast amounts of equity supported capital.
• C) The drug industry has a high debt to ordinary equity ratio because their earnings are very stable and thus, can support the large interest costs associated with higher debt levels.
• D) Wide variations in capital structures exist between industries and also between individual firms within industries and are influenced by unique firm factors including managerial attitudes.
• E) Since most shares sell at or around their book values, using accounting values provides an accurate picture of a firm's capital structure.

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Definitions:

State-Dependent Memory

The phenomenon that information learned in a particular state of mind is more easily recalled when in that same state.

Eidetic Imagery

A strong visual image of an object or scene that persists in some persons long after the object or scene is removed.

Tip-Of-The-Tongue Phenomenon

A temporary inability to retrieve a word or name from memory, paired with a sensation that retrieval is imminent.

Déjà Vu

The haunting sense of having previously seen or experienced a new scene or situation.