Which of the Following Statements Is CORRECT

question 42

Multiple Choice

Which of the following statements is CORRECT?

• A) The capital structure that maximizes the stock price is also the capital structure that minimizes the cost of equity from retained earnings (r_S).
• B) The capital structure that maximizes the stock price is also the capital structure that maximizes earnings per share.
• C) The capital structure that maximizes the stock price is also the capital structure that maximizes the firm's times interest earned (TIE)ratio.
• D) If a company increases its debt ratio,this will typically increase the marginal costs of both debt and equity,but it still may reduce the company's WACC.
• E) If Congress were to pass legislation that increases the personal tax rate but decreases the corporate tax rate,this would encourage companies to increase their debt ratios.

Calculate unit product costs using traditional and ABC systems.

Evaluate the impact of unused capacity on overhead rates and costs.

Analyze the financial implications of job-order costing decisions on gross margin.

Understand the concept of traditional costing system and how manufacturing overhead is applied using direct labor-hours.

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Definitions:

Demographics

Statistical data relating to the population and particular groups within it, often used for market research and policy making.

Published Ethical Guidelines

Officially documented principles that outline acceptable conduct and decision-making practices within an organization or profession.

Corporate

Relates to large companies or a group of companies acting as a single entity, especially in terms of legal and regulatory identity.

Ethical Conduct

Refers to the principles and standards that guide behavior in business and professional settings, ensuring fairness, transparency, and integrity.