Author Question: Which of the following statements is correct? (Read 41 times)

jordangardner · **on:** Aug 7, 2023

Which of the following statements is correct?

◦

If one firm has a lower debt ratio than another, we can be certain that the firm with the lower debt ratio will have the higher TIE ratio, as that ratio depends entirely on the amount of debt a firm uses.

◦

A firm’s debt ratio will not influence its profit margin and times-interest-earned ratio.

◦

If two firms differ only in their use of debt—i.e., they have identical assets, sales, operating costs, interest rates on their debt, and tax rates—but one firm has a lower debt ratio, the firm that uses less debt will have a higher profit margin on sales.

◦

If two firms differ only in their use of debt—i.e., they have identical assets, sales, operating costs, interest rates on their debt, and tax rates—but one firm has a lower debt ratio, the firm that uses less debt will have a lower profit margin on sales.

RodrickHac · **Reply #1 on:** Aug 7, 2023

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 39% of students answer this correctly