Which of the Following Statements Is Correct

question 7

Multiple Choice

Which of the following statements is correct?

• A) In general, a firm with low operating leverage also has a small proportion of its total costs in the form of fixed costs.
• B) There is no reason to think that changes in the personal tax rate would affect firms' capital structure decisions.
• C) A firm with high business risk is more likely to increase its use of financial leverage than a firm with low business risk, assuming all else equal.
• D) If a firm's after-tax cost of equity exceeds its after-tax cost of debt, it can always reduce its WACC by increasing its use of debt.

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Definitions:

Canadian Seniors

The demographic group in Canada comprising individuals aged 65 and older, often discussed in the context of healthcare, retirement, and social policy.

Impairments Into Disabilities

The process by which physical or mental impairments are translated into societal disabilities through environmental barriers and societal attitudes.

Sheltered Workshops

Facilities that provide employment and training for people with disabilities or social disadvantages in a controlled and protective setting.

Mental Impairments

Conditions that disrupt a person's thinking, feeling, mood, ability to relate to others, and daily functioning, often requiring clinical care or intervention.