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Reeves Corporation forecasts that its operating income (EBIT) and total assets will remain the same as last year, but that the companys debt ratio will

Reeves Corporation forecasts that its operating income (EBIT) and total assets will remain the same as last year, but that the companys debt ratio will increase this year. What can you conclude about the companys financial ratios? (Assume that there will be no change in the companys tax rate) *

  1. The companys return on assets (ROA) will fall.
  2. ROA will remain constant
  3. The companys equity multiplier (EM) will increase.
  4. B and C

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