Which One of the Following Statements Is Correct

question 18

Multiple Choice

Which one of the following statements is correct?

• A) If the debt-to-assets ratio is greater than 0.50,then the debt-to-equity ratio must be less than 1.0.
• B) Long-term creditors would prefer the times-interest-earned ratio be 1.4 rather than 1.5.
• C) The assets-to-equity ratio can be computed as 1 plus the debt-to-equity ratio.
• D) To realize the best risk and reward profile,financial leverage should be maximized.
• E) None of the above.

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Definitions:

American Grain Crops

Crops such as wheat, corn, barley, and oats that are primarily grown in the United States and are major components of the agricultural sector.

Price Supports

Government interventions to maintain the market price of a commodity or product at a certain minimum level to protect producers.

Environmental Pollution

The contamination of the natural environment by harmful substances or energies.

Marginal Land

Land that yields minimal profit from agricultural or another use, and its cultivation is often not considered worth the effort under normal circumstances.