Which of the following statements is CORRECT? Other things held constant, the mo

Question

Which of the following statements is CORRECT?

Other things held constant, the more debt a firm uses, the higher its operating margin will be.

Debt management ratios show the extent to which a firm's managers are attempting to magnify returns on owners' capital through the use of financial leverage.

Other things held constant, the more debt a firm uses, the higher its profit margin will be. Other things held constant, the higher a firm's debt ratio, the higher its TIE ratio will be.

Debt management ratios show the extent to which a firm's managers are attempting to reduce risk through the use of financial leverage.

The higher the debt ratio, the lower the risk

Explanation / Answer

.CORRECT

Debt management ratios show the extent to which a firm's managers are attempting to magnify returns on owners' capital through the use of financial leverage.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.