Which of the following statements is correct? a) The higher its debt ratio, the lower a firms BEP ratio will be, other things held constant. b) If a firms expected basic earning power (BEP) is constant for all of its assets and exceeds the interest rate on its debt, then adding assets and financing them with debt will raise the firms expected return on common equity (ROE). c) The higher its tax rate, the lower a firms BEP ratio will be, other things held constant. d) The higher the interest rate on its debt, the lower a firms BEP ratio will be, other things held constant. Why is ratio analysis useful? a) Its not useful; nobody in the real world ever uses this stuff. b) Unlike raw accounting data, ratios cannot be distorted by inflation. c) It eliminates the need to consider qualitative factors when evaluating a firms financial condition. d) It is a way of standardizing numbers and can facilitate comparisons between firms. e) It provides an easy, objective way of telling whether a company is, on balance, in a strong or weak position.