Which of the Following Statements Is True

question 13

Multiple Choice

Which of the following statements is true?

• A) When choosing a target capital structure, the goal is to increase the degree of operating leverage.
• B) A firm's degree of operating leverage has no impact on how much debt it uses.
• C) A firm's decision to use more debt can affect its cost of equity.
• D) Total leverage can be calculated by adding the degrees of financial and operating leverage together.
• E) All firms in an industry often have similar capital structures.

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Definitions:

Disability Payments

Government or private insurance disbursements that provide income support to individuals who are unable to work due to a disability.

Workers' Compensation

A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment.

Health and Safety Problems

These refer to workplace issues that can potentially harm the physical or mental health of employees, including injuries, illnesses, and stress.

HR Manager

A professional responsible for overseeing and managing human resources functions within an organization, including recruitment, training, performance management, and employee relations.