Which of the Following Statements Is CORRECT

question 56

Multiple Choice

Which of the following statements is CORRECT?

• A) If two firms differ only in their use of debt⎯i.e., they have identical assets, sales, operating costs, and tax rates⎯but one firm has a higher debt ratio, the firm that uses more debt will have a higher profit margin on sales.
• B) If one firm has a higher debt ratio than another, we can be certain that the firm with the higher debt ratio will have the lower TIE ratio, as that ratio depends entirely on the amount of debt a firm uses.
• C) A firm's use of debt will have no effect on its profit margin on sales.
• D) If two firms differ only in their use of debt⎯i.e., they have identical assets, sales, operating costs, interest rates on their debt, and tax rates⎯but one firm has a higher debt ratio, the firm that uses more debt will have a lower profit margin on sales.
• E) The debt ratio as it is generally calculated makes an adjustment for the use of assets leased under operating leases, so the debt ratios of firms that lease different percentages of their assets are still comparable.

Understand the theories and contributions of prominent psychologists like Piaget, Sternberg, and Kohlberg to child development.

Comprehend the relationship between genetics and intelligence.

Recognize the importance of memory processes like encoding and rehearsal in learning.

Understand the development and significance of moral reasoning in children.

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Definitions:

Institutional Investors

Entities such as pension funds, insurance companies, and mutual funds that invest large amounts of money in securities, real estate, and other investment assets.

Syndicated Offerings

A financing arrangement where multiple lenders team up to provide a borrower with a large loan, often used in big and complex projects.

Marketing Functions

Various activities or roles that are performed in the process of marketing goods and services, including product promotion, distribution, pricing, and customer service.

Investment Banks

Financial institutions that provide a variety of services, including underwriting, acting as intermediaries between securities issuers and investors, and offering financial advisory services.