The Use of Debt in the Firm's Capital Structure Will

question 62

Multiple Choice

The use of debt in the firm's capital structure will increase ROE if the firm:

• A) has more debt than equity.
• B) pays less in taxes than in interest.
• C) earns a higher return than the rate paid on debt.
• D) has a times interest earned ratio greater than 1.0.

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Definitions:

Product Mix

The total range of products that a company offers to its customers, encompassing various product lines, categories, and items.

Legal Perspective

Legal Perspective involves the understanding and interpretation of laws and regulations that impact various aspects of business and personal conduct.

Existing Offerings

Pertains to the range of products or services that a company already has available for sale to customers.

Feature Bloat

The excessive addition of features in a product, which can complicate its use and reduce its appeal.