Question 9 3 pts When a firm has financial leverage: risk is greater than if there isn't any leverage. ROI will be greater than ROE. the firm will always have a higher ROE than it would without leverage. ROI will usually be less than it would be without leverage. Question 10 3 pts The price/earnings ratio: does not usually change by more than 1.0 (e.g. 8.2 to 9.2) during the year. can be used to determine the cash dividend to be received during the year. is a measure of the relative expensiveness of a firm's common stock. is calculated by dividing the earnings multiple by net income. Question 11 3 pts When a corporation has both common stock and preferred stock outstanding: dividends on preferred stock are paid only if dividends are to be paid on the common stock dividends on preferred stock must be paid before dividends on common stock can be paid. dividends on preferred stock are paid only if the company has current earnings. O preferred stockholders receive the same dividend per share as common stockholders. Question 12 3 pts What does a common sized income statement do? is useful in estimating the impact of inflation. expresses items as a percentage of revenues. makes comparisons between years more difficult. uses the same dollar amount of revenues for each year