Companies Heidee and Leaudy Have the Same Tax Rate,sales,total Assets,and

question 40

Multiple Choice

Companies Heidee and Leaudy have the same tax rate,sales,total assets,and basic earning power.Both companies have positive net incomes.Company Heidee has a higher debt ratio and,therefore,a higher interest expense.Which of the following statements is CORRECT?

• A) Company Heidee has a lower times interest earned (TIE)ratio.
• B) Company Heidee has a lower equity multiplier.
• C) Company Heidee has more net income.
• D) Company Heidee pays more in taxes.
• E) Company Heidee has a lower ROE.

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Definitions:

Class Action

A lawsuit filed by one or several individuals on behalf of a larger group of people who are similarly affected by the same issue.

Unqualified U.S.-Origin Claim

A claim that suggests a product is entirely made in the U.S. without any conditions or exceptions, implying complete domestic production.

Misleading Advertising

Misleading advertising refers to marketing material that deceives or is likely to deceive, and can significantly alter a consumer's economic behavior.

Class Action

A class action is a lawsuit filed by one or more plaintiffs on behalf of a larger group of people who are similarly affected, to address issues common to the entire class.