Which One of the Following Provides the Greatest Tendency to Increase

question 12

Multiple Choice

Which one of the following provides the greatest tendency to increase the percentage of debt included in a company's optimal capital structure?

• A) Exceptionally high depreciation expenses
• B) Very low marginal tax rate
• C) Substantial tax shields from other sources
• D) Low probability of financial distress
• E) Minimal taxable income

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Definitions:

Consensus

A general agreement among a group of people, often achieved through discussion and compromise.

Distinctiveness

The quality or state of being notably different or unique in comparison to others, allowing for recognizable differentiation.

Consistency

The quality of always behaving or performing in a similar way, maintaining a standard.

Consistency

The quality of always behaving or performing in a similar manner, maintaining uniformity in actions over time.