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Which of the Following Statements Is Most Correct

Question 3

Multiple Choice

Which of the following statements is most correct?


A) If two companies have the same return on equity, they should have the same stock price.
B) If Company A has a higher profit margin and higher total assets turnover relative to Company B, then Company A must have a higher return on assets.
C) If Company A and Company B have the same debt ratio, they must have the same times interest earned (TIE) ratio.
D) Answers b and c are correct.
E) None of the answers above is correct.

Correct Answer:

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