Business, 08.04.2020 05:04 nicolemaefahey

Which of the following statements is CORRECT? a. If two firms differ only in their use of debt-i. e., they have identical assets, sales, operating costs, and tax rates-but one firm has a higher debt ratio, the firm that uses more debt will have a higher profit margin on sales. b. A firm's use of debt will have no effect on its profit margin on sales. c. The debt 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. d. If one firm has a higher debt ratio than another, we can be certain that the firm with the higher debt ratio will have the lower TIE ratio, as that ratio depends entirely on the amount of debt a firm uses. e. 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 higher debt ratio, the firm that uses more debt will have a lower profit margin on sales.

Answers: 2

Show answers

Other questions on the subject: Business

Business, 21.06.2019 23:20, christopherschool04

On october 2, 2016 starbucks corporation reported, on its form 10-k, the following (in millions): total assets $14,329.5 total stockholders' equity 5,890.7 total current liabilities 4,546.9 what did starbucks report as total liabilities on october 2, 2016? select one: a. $12,516.7 million b. $6,377.3 million c. $995.0 million d. $8,438.8 million e. none of the above

Answers: 2

continue

Business, 22.06.2019 02:10, dakodahepps

Materials purchases (on credit). direct materials used in production. direct labor paid and assigned to work in process inventory. indirect labor paid and assigned to factory overhead. overhead costs applied to work in process inventory. actual overhead costs incurred, including indirect materials. (factory rent and utilities are paid in cash.) transfer of jobs 306 and 307 to finished goods inventory. cost of goods sold for job 306. revenue from the sale of job 306. assignment of any underapplied or overapplied overhead to the cost of goods sold account. (the amount is not material.) 2. prepare journal entries for the month of april to record the above transactions.

Answers: 1

continue

Business, 22.06.2019 07:30, nanamath5662

Select the correct answer the smith family adopted a child. the adoption procedure took about three months, and the family incurred various expenses. will the smiths receive and financial benefit for the taxable year? a) they will not receive any financial benefit for adopting the child b) their income tax component will decrease c) they will receive childcare grants d) they will receive a tax credit for the cost borne for adopting the child e) they will receive several tax deductions

Answers: 3

continue

Business, 22.06.2019 16:30, emmmssss21

Bernard made a gift of $500,000 to his brother in 2014. due to bernard’s prior taxable gifts he paid $200,000 of gift tax. when bernard died in 2019, the applicable gift tax credit had increased. at bernard’s death, what amount related to the $500,000 gift to his brother is included in his gross estate?

Answers: 3

continue

You know the right answer?

Which of the following statements is CORRECT? a. If two firms differ only in their use of debt-i. e....