Which of the following statements is true?
A) Financial theorists have resolved the issue of how to maximize firm value by altering capital structure.
B) Firms increase their debt usage when markets overvalue the firm.
C) Firms with a high degree of operating leverage usually maintain high debt ratios.
D) A firm's long-term earnings are more important than its near-term cash flows in determining the amount of debt to issue.
E) A highly leveraged firm has less flexibility to take advantage of investment opportunities than companies with low debt ratios.
E
You might also like to view...
During a small group meeting, where will coworkers find most of the meaning of the message?
A) Most of the meaning will come from the words spoken. B) Most of the meaning will come from the accuracy of the handouts. C) Most of the meaning will come from nonverbal cues. D) Most of the meaning will come from the list of those invited to the meeting. E) Most of the meaning will come from the visual aids such as PowerPoints.
Which of the following serves as a motive for an organization or venture to qualify as a partnership?
A) The organization seeks to increase its stake in the percentage of profits made by the business. B) The organization seeks to avoid personal liability. C) The organization wants to make a profit. D) The organization wants to reduce the number of approvals it seeks before taking decisions.