Which of the Following Is NOT a Factor Offsetting the Tax

question 52

Multiple Choice

Which of the following is NOT a factor offsetting the tax advantage of debt as a source of financing?

• A) increased agency costs
• B) increased probability of financial distress (bankruptcy) due to fixed interest payments
• C) alternative tax shields to those supplied by interest payments
• D) All of the above offset the tax advantage of debt as a source of financing.

---

Definitions:

Work Setting

Refers to the physical and social environment in which individuals perform their job tasks.

Social Cognitive

A theoretical perspective focusing on learning through observation and the interaction of cognitive, behavioral, and environmental influences.

Classically Conditioned

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus.

Conscious Control

The deliberate use of one's awareness to guide, manage, or direct one's thoughts or actions.