All Else Equal, Which of the Following Statements Is (Are)true

question 41

Multiple Choice

All else equal, which of the following statements is (are) true?

• A)The more debt a firm uses, the riskier its equity becomes, which, in turn, causes the value of both the debt and the equity to decrease.
• B)The lower the cost of capital of a firm, the higher will be its market value.
• C)The higher the P/E ratio, the higher the value of the firm will be.
• D)All of the above are true statements.

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Definitions:

Parenchyma

A type of living plant tissue consisting of relatively unspecialized cells with thin cell walls that function in photosynthesis, storage, and as the site of many metabolic processes.

Tracheids

Tracheids are elongated cells in the xylem of vascular plants that serve in transport and structural support, facilitating the flow of water.

Xylem

The vascular tissue in plants that conducts water and dissolved nutrients from the roots to the rest of the plant and provides structural support.

Collenchyma

A type of plant tissue known for its flexible and elastic properties, providing structural support mainly in areas of growth.