The Highest Possible Value for the Interest-Burden Ratio Is ________

Multiple Choice

The highest possible value for the interest-burden ratio is ________, and this occurs when the firm ________.

A) 0; uses as much debt as possible
B) 1; uses debt to the point where ROA = interest cost of debt
C) 1; uses no interest-bearing debt
D) -1; pays down its existing debts