Which of the Following Statements Is CORRECT, Holding Other Things

question 5

Multiple Choice

Which of the following statements is CORRECT, holding other things constant?

• A) Firms whose assets are relatively liquid tend to have relatively low
• Bankruptcy costs, hence they tend to use relatively little debt.
• B) An increase in the personal tax rate is likely to increase the debt ratio of the average corporation.
• C) If changes in the bankruptcy code make bankruptcy less costly to corporations, then this would likely reduce the debt ratio of the
• Average corporation.
• D) An increase in the company's degree of operating leverage is likely
• To encourage a company to use more debt in its capital structure.
• E) An increase in the corporate tax rate is likely to encourage a company to use more debt in its capital structure.

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Definitions:

California

A state located on the west coast of the United States, known for its diverse geography, vibrant economy, and significant contributions to the nation's technology and entertainment industries.

Coffee Sales

Transactions that involve the buying and selling of coffee products to consumers or businesses.

Total Revenue

The total amount of money generated from the sale of goods or services by a company before any expenses are deducted.

Total Revenue

The total amount of money received by a company from sales of goods or services before any expenses are subtracted.