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For a Given Level of Profitability as Measured by Profit

Question 9

Multiple Choice

For a given level of profitability as measured by profit margin, the firm's return on equity will


A) increase as its debt-to-assets ratio decreases.
B) decrease as its current ratio increases.
C) increase as its debt-to-assets ratio increases.
D) decrease as its times-interest-earned ratio decreases.

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