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:

Alcohol

A psychoactive substance and depressant that is found in beverages such as beer, wine, and spirits, affecting the central nervous system.

Psychological Dependence

a form of dependence characterized by a perceived need to use a substance or engage in a behavior to achieve emotional or psychological well-being.

Heroin

An opioid drug made from morphine, a natural substance taken from the seed pod of various opium poppy plants, highly addictive and illegal.

Narcolepsy

A lasting sleep disturbance featuring overwhelming sleepiness throughout the day and abrupt instances of sleeping.