Which of the Following Is Correct

question 14

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 common equity ratios due to their need for vast amounts of equity supported capital.
• C) The drug industry has a high debt to common 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 stocks sell at or around their book values,using accounting values provides an accurate picture of a firm's capital structure.

Comprehend the regulatory landscape of securities markets, including key legislation and the establishment of the SEC.

Identify the process and significance of public offerings in the securities market.

Recognize the ethical and professional standards set forth by the CFA Institute.

Understand the process and components of an initial public offering (IPO).

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Definitions:

Social Perception

The process by which individuals form impressions of and make inferences about other people and events in their social world.

Fundamental Attribution

The tendency to overestimate the effect of personality or disposition and underestimate the influence of situational factors in explaining others' behavior.

Conceptual Filtering

The process of selectively paying attention to information that is relevant to one's existing beliefs and concepts.

Organizational Setting

A specific environment or context within which organizations operate, including their culture, structures, and processes.