Which of the following statements is CORRECT?

Question $13$ options:

A firm that employs financial leverage will have a higher equity multiplier than an otherwise identical firm that has no debt in its capital structure.

Bond financing is better than stock financing for investors because income from bonds is taxed on a more favorable basis than income from stock.

The use of debt financing will tend to lower the basic earning power ratio, other things held constant.

All else equal, increasing the debt ratio will increase the ROA.

If two firms have identical sales, interest rate paid, operating costs, and assets, but they differ in the way they are financed, the firm with less debt will generally have the higher expected ROE.