Which of the Following Events Is Likely to Encourage a Company

question 48

Multiple Choice

Which of the following events is likely to encourage a company to raise its target debt ratio,other things held constant?

• A) An increase in the corporate tax rate.
• B) An increase in the personal tax rate.
• C) An increase in the company's operating leverage.
• D) The Federal Reserve tightens interest rates in an effort to fight inflation.
• E) The company's stock price hits a new high.

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Definitions:

Unemployment Rate

The share of the labor market that is unemployed and searching for a job actively.

Structural Unemployment

Joblessness caused by the restructuring of industries, often as a result of advancements in technology, rather than variations in market supply or demand.

Newspapers

Publications that contain written information on current events, features, and advertisements, often published daily or weekly.

Internet

A global network of interconnected computers and servers that facilitates the exchange of data and communication.