When Assessing the Fixed-Payment Coverage Ratio,________

question 87

Multiple Choice

When assessing the fixed-payment coverage ratio,________.

• A)the lower its value the more risky is the firm
• B)the lower its value,the higher is the firm's financial leverage
• C)preferred stock dividend payments can be disregarded
• D)the higher its value,the more difficult it is for a firm to pay its debts

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Definitions:

Drunk Drivers

Individuals who operate a vehicle while under the influence of alcohol, significantly increasing the risk of accidents and impairments in judgement and coordination.

Proportion

A part, share, or number considered in comparative relation to a whole.

Independent

Not influenced or controlled by others; acting freely.

P(A|B)

The likelihood of event A happening provided that event B has taken place.