Which One of the Following Statements Is Correct

Multiple Choice

Which one of the following statements is correct?

A) If the total debt ratio is greater than .50, then the debt-equity ratio must be less than 1.0.
B) Long-term creditors would prefer the times interest earned ratio be 1.4 rather than 1.5.
C) The debt-equity ratio can be computed as 1 plus the equity multiplier.
D) An equity multiplier of 1.2 means a firm has $1.20 in sales for every $1 in equity.
E) An increase in the depreciation expense will not affect the cash coverage ratio.