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:

Costs of Delay

The negative consequences or losses associated with not resolving a problem or completing a task in a timely manner.

Distributive Bargaining Strategies

Negotiation techniques focused on dividing a fixed amount of resources, often resulting in a win-lose situation.

Resistance Point

The least favorable point at which one will accept a negotiated agreement.

Presumptive Method

A technique or approach that assumes certain outcomes or conditions as a basis for further discussion or analysis.