Which of the Following Statements Is False

question 114

Multiple Choice

Which of the following statements is false?

• A)the price-to-book ratio measures the market's value of the firm relative to balance sheet equity.
• B)the equity multiplier ratio is calculated as owners' equity divided by total assets.
• C)the degree of operating leverage measures the sensitivity of operating income to changes in the level of output.
• D)all the above statements are correct.

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Definitions:

Dividends

Shareholders' receipts of payments from a corporation, generally tied to the distribution of earnings.

Incorporated

A legal process used to form a corporate entity or company, recognized separately from its owners with its own legal rights.

Capital Account

An account on a country's balance of payments that records all transactions involving the purchase or sale of assets.

Board Of Directors

A group of individuals elected to represent shareholders and oversee the major decisions and policies of a company.