Which One of the Following Statements Is Correct

question 7

Multiple Choice

Which one of the following statements is correct?

• A) The greater the volatility of EBIT, the more a firm should borrow.
• B) Firms with a large percentage of assets invested in intangibles, should borrow more than a comparable firm with a minimal investment in intangibles.
• C) A firm with a high annual depreciation write-off benefits more from leverage than a comparable firm with a low annual depreciation write-off.
• D) The static model of capital structure identifies the precise debt-equity ratio that optimizes the value of the firm.
• E) Firms with high tax rates have a greater incentive to borrow than firms with low tax rates.

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Definitions:

Demeaning Messages

Communications that degrade, insult, or belittle others, often impacting the recipient's self-esteem or position.

Barriers

Obstacles or factors that hinder progress or achievement.

Accumulated Perceptions

The total or aggregate views and understandings formed by an individual or group, built up over time.

Lenses

Tools or perspectives through which subjects or issues are analyzed or viewed.