Which of the following statements is CORRECT? a. Other things held constant, the more debt a firm uses, the higher its operating margin will be. b. Debt management ratios show the extent to which a firm's managers are attempting to magnify returns on owners' capital through the use of financial leverage. c. Other things held constant, the more debt a firm uses, the higher its profit margin will be. d. Other things held constant, the higher a firm's debt ratio, the higher its TIE ratio will be. e. Debt management ratios show the extent to which a firm's managers are attempting to reduce risk through the use of financial leverage. f. The higher the debt ratio, the lower the risk.

b. Debt management ratios show the extent to which a firm's managers are attempting to magnify returns on owners' capital through the use of financial leverage.

Explanation:

The assertion is correct that a company's borrowing which can also be referred to as leverage refers to the use of debt in the acquisition of more assets for the company. As the company has these more assets within its control, it can generate a greater amount of returns by using them to increase its level of production and sales which will cause the returns on owners' equity to increase.