Business, 02.12.2019 18:31, timothyallenhall2006

Which of the following statements is correct?

question 33 options:

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

a firm's use of debt will have no effect on its profit margin.

if two firms differ only in their use of debt--i. e., they have identical assets, identical total invested capital, sales, operating costs, interest rates on their debt, and tax rates--but one firm has a higher total debt to total capital ratio, the firm that uses more debt will have a lower profit margin on sales and a lower return on assets.

the total debt to total capital ratio as it is generally calculated makes an adjustment for the use of assets leased under operating leases, so the debt ratios of firms that lease different percentages of their assets are still comparable.

if two firms differ only in their use of debt--i. e., they have identical assets, identical total invested capital, operating costs, and tax rates--but one firm has a higher total debt to total capital ratio, the firm that uses more debt will have a higher operating margin and return on assets.

Answers: 2

Show answers

Other questions on the subject: Business

Business, 22.06.2019 08:30, Naomi7021

Conor is 21 years old and just started working after college. he has opened a retirement account that pays 2.5% interest compounded monthly. he plans on making monthly deposits of $200. how much will he have in the account when he reaches 591 years of age?

Answers: 2

continue

Business, 22.06.2019 19:50, kipper5760

Bulldog holdings is a u. s.-based consumer electronics company. it owns smaller firms in japan and taiwan where most of its cell phone technology is developed and manufactured before being released worldwide. which of the following alternatives to integration does this best illustrate? a. venture capitalism b. franchising c. joint venture d. parent-subsidiary relationship

Answers: 2

continue

Business, 22.06.2019 20:20, 24jgrove

John has served as the chief operating officer (coo) for business graphics, inc., a publicly owned firm, the past 5 years. which of the following statements about john is correct? both john and the ceo of business graphics must certify to the sec that the firm's financial statements are accurate. as the coo, john will be ranked higher than the ceo but still below the cfo. in john's postition as the coo, it is highly unlikely that he would also be the chairperson of the board of directors. as the coo, john would typically be involved with accounting, finance, and asset purchase decisions.

Answers: 2

continue

Business, 23.06.2019 00:50, LuckyCharms988

Alpine west, inc., operates a downhill ski area near lake tahoe, california. an all-day, adult ticket can be purchased for $55. adult customers also can purchase a season pass that entitles the pass holder to ski any day during the season, which typically runs from december 1 through april 30. the season pass is nontransferable, and the $450 price is nonrefundable. alpine expects its season pass holders to use their passes equally throughout the season. the company’s fiscal year ends on december 31. on november 6, 2009, jake lawson purchased a season ticket. required: 1. when should alpine west recognize revenue from the sale of its season passes? 2. prepare the appropriate journal entries that alpine would record on november 6 and december 31. 3. what will be included in the 2009 income statement and 2009 balance sheet related to the sale of the season pass to jake lawson?

Answers: 3

continue

Do you know the correct answer?

Which of the following statements is correct?

question 33 options:

if on...