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:

Retention

Refers to the ability to keep or maintain something, such as knowledge, information, or employees within a company.

Digital Reading

The act of reading text displayed on digital devices, such as e-readers, tablets, or computers, as opposed to printed material.

Weak Eyesight

A common condition that impairs a person's ability to see clearly, requiring corrective measures like glasses or contact lenses.

Mind Receptivity

The willingness or ability of the mind to receive and consider new information or ideas.