A Company Has a Tax Rate of 40 $\begin{array} { l rr } & \text { Interest } &\mathrm{ROA} \\ &\text { rate } \\\end{array}$

question 134

Multiple Choice

A company has a tax rate of 40%. Leverage would be beneficial for the company for each of the following combinations of interest rates and ROA except
$\begin{array} { l rr } & \text { Interest } &\mathrm{ROA} \\ &\text { rate } \\\end{array}$
a) $\begin{array} { l rr } & 4 \% &&& 6 \% \\\end{array}$
b) $\begin{array} { l rr } & 6 \% &&& 6 \% \\\end{array}$
c) $\begin{array} { l rr } & 14 \% &&& 10 \% \\\end{array}$
d) $\begin{array} { l rr } & 16 \% &&& 10 \% \\\end{array}$

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.