Which of the Following Statements Is CORRECT

Multiple Choice

Which of the following statements is CORRECT?

A) Other things held constant, the more debt a firm uses, the higher its operating margin will be.
B) Debt management ratios show the extent to which a firm's managers are attempting to magnify returns on owners' capital through the use of financial leverage.
C) Other things held constant, the more debt a firm uses, the higher its profit margin will be.
D) Other things held constant, the higher a firm's debt ratio, the higher its TIE ratio will be.
E) Debt management ratios show the extent to which a firm's managers are attempting to reduce risk through the use of financial leverage. The higher the debt ratio, the lower the risk.