Which of the Following Statements Is Correct

question 10

Multiple Choice

Which of the following statements is correct?

• A)Generally, debt-to-total-assets ratios do not vary much among different industries, although they do vary among firms within a given industry.
• B)Electric utilities generally have very high common equity ratios because their revenues are more volatile than those of firms in most other industries.
• C)Prescription drug companies generally have high debt-to-equity ratios because their earnings are very stable, and therefore they can cover the high interest costs associated with high debt levels.
• D)Wide variations in capital structures exist both between industries and among individual firms within given industries. These differences are caused by differing business risks and also managerial attitudes.

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Definitions:

Societal Standards

Norms and expectations set by a society that influence the behavior and attitudes of its members.

Self-Disclosure

The act of revealing personal, private, or sensitive information about oneself to others, which plays a critical role in forming close relationships.

Relationship

The manner in which two or more ideas, objects, or individuals are linked, or the condition of being linked.

Traumatic Childhood

A period in an individual's early life characterized by experiences of severe psychological trauma, which can have lasting negative effects on mental and emotional development.