FIN 534 RANK Imagine Your Future /fin534rank.com FIN 534 RANK Imagine Your Future /fin534rank.com | Page 28

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Question 14
Which of the following statements is CORRECT?
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Question 15
Two operationally similar companies, HD and LD, have the
same total assets, operating income (EBIT), tax rate, and business risk.
Company HD, however, has a much higher debt ratio than LD. Also
HD's basic earning power (BEP) exceeds its cost of debt (rd). Which of
the following statements is CORRECT?
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Question 16
Which of the following events is likely to encourage a company
to raise its target debt ratio, other things held constant?
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Question 17
A lockbox plan is