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Please help 1. In risk-free environment, lower debt ratios always indicate good debt management * True False 2. If the liquidity, asset management, debt management,
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1. In risk-free environment, lower debt ratios always indicate good debt management * True False 2. If the liquidity, asset management, debt management, and profitability ratios all look bad and if investors think these ratios will continue to look bad in the future, the market value ratios will be high, the stock price will be as low as can be expected, and management will be judged to have been doing a bad job. * True False 3. The current real rate is the current interest rate minus the current (or latest past) inflation rate, while the real rate (without the word current) is the current interest rate minus the expected future inflation rate over the life of the security. 3. The current real rate is the current interest rate minus the current (or latest past) inflation rate, while the real rate (without the word current) is the current interest rate minus the expected future inflation rate over the life of the security True False 4. It might be possible to improve the ROE by using more debt, which in turn will lead to an increase in the P/E ratio and thus in the firm's stock price True False 5. Excess inventory level will increase the current ratio and the liquidity of the company True FalseStep by Step Solution
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