Which of the Following Statements Is Not True About the Times-Interest-Earned

question 40

Multiple Choice

Which of the following statements is not true about the times-interest-earned ratio?

• A)The greater the times interest earned the lower the risk of defaulting on the firm's debt.
• B)The greater the interest expense,the lower the firm's times-interest-earned ratio.
• C)The smaller the times-interest-earned the lower the financial risk of the company.
• D)A high times-interest-earned and a high debt to equity ratio means the company is effectively using financial leverage.

---

Definitions:

Positive Feelings

Emotions that create a sense of well-being, happiness, or satisfaction.

Thalamus

A structure in the brain that acts as a relay station, processing and transmitting sensory and motor signals to and from the cerebral cortex.

Cortex

Outermost covering of the brain consisting of densely packed neurons, responsible for higher thought processes and interpretation of sensory input.

Emotions

Complex psychological states that involve physiological arousal, expressive behaviors, and conscious experience.