Which One of the Following Statements Is Correct

question 67

Multiple Choice

Which one of the following statements is correct?

• A) The lower the level of a firm's debt, the higher the firm's leverage.
• B) The lower the level of a firm's debt, the lower the firm's equity multiplier.
• C) The lower the level of a firm's debt, the higher the firm's equity multiplier.
• D) The tax benefit from using debt financing reduces a firm's risk.

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Definitions:

Learning Strategy Interventions

Techniques or programs designed to improve cognitive processes and skills, such as note-taking, summarizing, and self-questioning, to enhance learning effectiveness.

Learning Disabilities

Neurologically based processing problems that can interfere with learning basic skills such as reading, writing, or math, as well as higher-level skills like organization, time planning, and abstract reasoning.

Square-root Rule

A mathematical formula used in inventory management to estimate the impact of changing the number of locations on inventory levels.

Stocking Locations

Specific places where inventory is stored and managed, such as warehouses or retail storerooms.