Which One of the Following Statements Is Correct

question 21

Multiple Choice

Which one of the following statements is correct?

• A) If the debt-to-assets ratio is greater than 0.50, then the debt-to-equity ratio must be less than 1.0.
• B) Long-term creditors would prefer the times interest earned ratio be 1.4 rather than 1.5.
• C) The assets-to-equity ratio can be computed as 1 plus the debt-to-equity ratio.
• D) To realize the best risk and reward profile, financial leverage should be maximized.
• E) None of the above is correct.

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Definitions:

Active Listening

A communication technique that requires the listener to fully concentrate, understand, respond, and then remember what is being said.

Processing

The act of understanding and remembering what is being said as well as making an effort to empathize with the speaker’s feelings and thoughts and the situation at hand.

Remembering

The process of recalling or recognizing information, experiences, or people from one's past.

Horizontal Communication

The exchange of information or messages between individuals or departments at the same level within an organization.