Which One of the Following Statements Is Correct

question 51

Multiple Choice

Which one of the following statements is correct?

• A) If the total debt ratio is greater than .50, then the debt-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 debt-equity ratio can be computed as 1 plus the equity multiplier.
• D) An equity multiplier of 1.2 means a firm has $1.20 in sales for every $1 in equity.
• E) An increase in the depreciation expense will not affect the cash coverage ratio.

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Definitions:

Principle Of Fallibility

The principle that all human knowledge or interpretations are inherently fallible and subject to error.

Egregious Moral Wrongdoing

An action or behavior that is outstandingly bad or reprehensible from a moral standpoint.

Principle Of Understanding

A foundational rule advocating for the striving towards comprehension and empathy in interactions and judgments.

Applied Ethics

A branch of ethics that deals with the application of moral principles to specific real-world issues and situations.