Which of the Following Statements Is True

question 62

Multiple Choice

Which of the following statements is true?

• A)The greater the use of debt, the higher the P/E ratio of a firm will be.
• B)Debt has no effect on the P/E ratio of a firm.
• C)Debt has an effect on the P/E ratio of a firm, but it may cause either an increase or a decrease in the ratio, depending on whether or not the firm is a growth firm.
• D)The greater the use of debt, the lower the P/E ratio of a firm will be.

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Definitions:

Rock 'n Roll Star

A celebrity or notable figure in the genre of rock and roll music, often characterized by a charismatic presence and significant influence on the music and culture.

Miles Davis

An influential American jazz musician, trumpeter, bandleader, and composer known for his innovative contributions to jazz music.

Racism

Bias, unfair treatment, or hostility towards individuals of another race, stemming from the conviction that one's own race is supreme.