Quiz Ch 04 – T/F Times Interest Earned Ratio and Interest Expense
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: When interest expense is high, the interest earned ratio is also high.
True or false: When interest expense is high, the interest earned ratio is also high.
True or false: Assessing whether a firm’s financial position is getting better or worse involves more than just the ratios of a single year. One way to scrutinize shifts in a firm’s performance across time is through trend analysis.
True or false: Amortization refers to the diminishing value of intangible assets over time.
True or false: The basic earning power ratio (BEP) signifies a firm’s asset earning capability, accounting for financial leverage and tax influences.
True or false: Ratio analysis entails scrutinizing financial statements to aid in evaluating a company’s financial standing and resilience.
True or false: The income statement of a company provides information about its assets and liabilities during a defined time period.
True or false: Valuating a firm with a supernormal (variable) growth rate in its initial years is not feasible.
If Taggart Technologies decides to issue new common stock and use the proceeds to reduce its existing debt, with no effect on total assets, interest rates, EBIT, or the tax rate, which of the following outcomes is likely to happen?
Which type of fund is generally known for its superior tax efficiency?
What events trigger taxable outcomes for mutual fund investors?