Other Things Held Constant,which of the Following Events Would Be

question 17

Multiple Choice

Other things held constant,which of the following events would be most likely to encourage a firm to increase the amount of debt in its capital structure?

• A) Its sales are projected to become less stable in the future.
• B) The bankruptcy laws are changed in a way that would make bankruptcy more costly to the firm and its stockholders.
• C) Management believes that the firm's stock is currently overvalued.
• D) The firm decides to automate its factory with specialized equipment and thus increase its use of operating leverage.
• E) The corporate tax rate is increased.

---

Definitions:

Inducer Molecule

A substance that initiates the expression of genes by interacting with a repressor or an activator.

Active Repressor

A molecular form of a repressor protein that can bind to specific regions of DNA and inhibit gene transcription.

Transcriptional Activity

The process of copying a segment of DNA into RNA by the enzyme RNA polymerase, crucial in gene expression.

Noncoding Region

Sections of DNA that do not code for proteins but may have regulatory roles in gene expression, chromatin structure, and genome organization.