If Two Companies Have the Same Revenues and Operating Expenses,their

question 36

True/False

If two companies have the same revenues and operating expenses,their net incomes will still be different if one company finances its assets with more debt and the other company with more equity.

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Definitions:

British Pounds

The currency of the United Kingdom, also known as sterling.

Euros

The official currency of the eurozone, which consists of 19 of the 27 European Union countries.

Risk-Free Rate

The expected return from an investment that carries no risk of financial loss, usually symbolized by government bonds.

Inflation Rate

How quickly the broad level of prices for goods and services climbs, degrading the spending capability.