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.

Know Horney's critique of Freud and her own theories on personality development.

Recognize the significance of social and environmental factors in personality development as seen by Horney.

Understand Freud and Erikson's contributions to personality theory.

Learn about the role of unconditional positive regard in Rogers's theory of personality.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

Times Interest Earned

A ratio that assesses the risk that bondholders will not receive their interest payments or that interest payments will not be made if earnings decrease. The ratio is computed as income before income tax expense plus interest expense divided by interest expense.

Interest Expense

The cost incurred by an entity for borrowed funds, often reflected as a line item on the income statement.

Days' Sales

A financial metric that estimates the average time it takes for a company to convert its inventory into sales.