Multiple Choice
Which of the following statements is not true about the times-interest-earned ratio?
A) The greater the times interest earned the lower the risk of defaulting on the firm's debt.
B) The greater the interest expense,the lower the firm's times-interest-earned ratio.
C) The smaller the times-interest-earned the lower the financial risk of the company.
D) A high times-interest-earned and a high debt to equity ratio means the company is effectively using financial leverage.
Correct Answer:
Verified
Correct Answer:
Verified
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