Author Question: When assessing the fixed-payment coverage ratio, ________. A) the lower its value the more risky ... (Read 12 times)

silviawilliams41 · **on:** Jul 11, 2018

When assessing the fixed-payment coverage ratio, ________.

A) the lower its value the more risky is the firm
B) the lower its value, the higher is the firm's financial leverage
C) preferred stock dividend payments can be disregarded
D) the higher its value, lesser is its reliability to pay up the debts

Question 2

The cost of retained earnings is always lower than the cost of a new issue of common stock due to the absence of flotation costs when financing projects with retained earnings.

Indicate whether the statement is true or false