Which One of the Following Statements Is Correct

question 280

Multiple Choice

Which one of the following statements is correct?

• A) The greater the volatility of EBIT, the more a firm should borrow.
• B) Firms with a large percentage of assets invested in intangibles, should borrow more than a comparable firm with a minimal investment in intangibles.
• C) A firm with a high annual depreciation write-off benefits more from leverage than a comparable firm with a low annual depreciation write-off.
• D) The static model of capital structure identifies the precise debt-equity ratio that optimizes the value of the firm.
• E) Firms with high tax rates have a greater incentive to borrow than firms with low tax rates.

---

Definitions:

Guests

Individuals who are invited to or visit a place or event, typically receiving hospitality from the host.

Planning Budget

A planning budget refers to a financial plan that estimates income, expenditure, and resources over a certain period, tailored to achieve specific goals or objectives.

Customers Served

The number of clients or customers to whom a business has provided products or services.

Revenue

The aggregate sum of funds a company acquires from selling products or offering services over a specific period.