Although the Use of Debt Provides Tax Benefits to the fiRm

question 20

Multiple Choice

Although the use of debt provides tax benefits to the firm, debt also puts pressure on the firms to:

• A)meet interest and principal payments which, if not met, can put the company into financial
• Distress.
• B)make dividend payments which if not met can put the company into financial distress.
• C)meet both interest and dividend payments which when met increase the firm cash flow.
• D)meet increased tax payments thereby increasing firm value.
• E)None of the above.

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Definitions:

Basic Rights

Fundamental entitlements and freedoms that individuals are guaranteed by law or society, such as freedom of speech and right to privacy.

Unethical

Actions or decisions that go against moral principles and standards, often resulting in harm or disadvantage to others.

Health Standards

Set criteria or norms established for maintaining or improving health, often through regulatory measures, in environments such as workplaces, schools, and public areas.

Kohlberg's Theory

A theory proposed by Lawrence Kohlberg that outlines six stages of moral development, emphasizing the progression of ethical reasoning through different levels of moral thought.