Which of the Following Statements Is CORRECT

question 11

Multiple Choice

Which of the following statements is CORRECT?

• A) Increasing its use of financial leverage is one way to increase a firm's return on investors' capital (ROIC).
• B) If a firm lowered its fixed costs but increased its variable costs by just enough to hold total costs at the present level of sales constant,this would increase its operating leverage.
• C) The debt ratio that maximizes expected EPS generally exceeds the debt ratio that maximizes share price.
• D) If a company were to issue debt and use the money to repurchase common stock,this would reduce its return on investors' capital (ROIC).(Assume that the repurchase has no impact on the company's operating income. )
• E) If a change in the bankruptcy code made bankruptcy less costly to corporations,this would tend to reduce corporations' debt ratios.

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Definitions:

White Males

A demographic group identified by race (White) and gender (male), often discussed in sociopolitical and cultural contexts.

African-American Women

Women of African descent living in the United States, encompassing a wide range of cultures, experiences, and social conditions.

Living Will

A legal document articulating an individual's wishes regarding medical treatment in situations where they are no longer able to express informed consent.

Life Support

Medical devices or techniques sustaining essential bodily functions in patients who are critically ill.