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:

Decentralized Organization

An organizational structure where decision-making authority is distributed across various levels rather than being concentrated at a single point.

Corporate Office

The central or main office of a company, where key administrative and executive activities occur, often housing the CEO and other top management.

Top Management

The highest level of administration and decision making in an organization, typically including positions such as CEO, CFO, and other executive roles.

Adaptive

The ability or tendency to adjust effectively to new or changing environments or situations.