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What best explains why a firm's ratio of long-term debt/total capital is lower than the industry average, while the ratio of income before interest and
What best explains why a firm's ratio of long-term debt/total capital is lower than the industry average, while the ratio of income before interest and taxes/debt interest charges is higher than the industry average?
A. | The firm has a high ratio of current assets/current liabilities. | |
B. | The firm pays lower interest on long-term debt than the average firm. | |
C. | None of the options are correct. | |
D. | The firm has more short-term debt than average.
| |
E. | The firm has a high ratio of total cash flow/long term debt. |
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