Which of the Following Statements Regarding a Firm's Choice of Financing

question 37

Multiple Choice

Which of the following statements regarding a firm's choice of financing is false?

• A)Firms with higher marginal tax rates are more likely to issue debt than equity.
• B)Firms with greater profitability are more likely to issue debt than equity.
• C)Firms with more tangible assets are likely to use more debt in their capital structures.
• D)Firms with fewer intangible assets are likely to use less debt in their capital structures.

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Definitions:

Determinants

Factors or elements that bring about an outcome or influence a result.

Classification System

An organized method for categorizing and systematizing objects or information based on established criteria.

Job Evaluation

A systematic process used to assess the relative value of jobs within an organization, for the purpose of establishing fair compensation.

Private Pension Plans

Retirement plans funded and maintained by private sector employers, providing employees with a fixed or variable pension payment upon retirement, separate from government pension schemes.