What best explains why a firm's ratio of long-term debt/total capital is lower than the industry average,
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Question:
What best explains why a firm's ratio of long-term debt/total capital is lower than the industry average, while the ratio of income before interest and taxes/debt interest charges is higher than the industry average?
A.The firm has a high ratio of current assets/current liabilities.
B.The firm pays lower interest on long-term debt than the average firm.
C.None of the options are correct.
D.The firm has more short-term debt than average.
E.The firm has a high ratio of total cash flow/long term debt.
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