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Which of the following statements is CORRECT? a. Increasing financial leverage is one way to increase a firm's basic earning power (BEP). b. Firms with
Which of the following statements is CORRECT? a. Increasing financial leverage is one way to increase a firm's basic earning power (BEP). b. Firms with lower fixed costs tend to have greater operating leverage. c. The debt ratio that maximizes EPS generally exceeds the debt ratio that maximizes share price. d. If a company were to issue debt and use the money to repurchase common stock, then this should cause the company's return on assets to increase.
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