Exhibit 1A-9 Multi-Curve Graph

question 37

Multiple Choice

Exhibit 1A-9 Multi-curve graph

-Exhibit 1A-9 represents a three-variable relationship.As the annual income of consumers falls from $50,000 (line A) to $30,000 (line B) ,the result is a(n) :

• A) rightward movement along each curve.
• B) leftward movement along each curve.
• C) leftward shift in curve A to curve B.
• D) rightward shift in curve A to curve B.

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Definitions:

Capital Structure

The mixture of debt and equity that a company uses to finance its operations and growth.

Tax Shield

The reduction in income taxes that result from taking a deductible expense, such as mortgage interest, which reduces taxable income.

Financial Distress Costs

Expenses that a company faces when it is having difficulty meeting its financial obligations, which can include legal, restructuring, and operational costs.

Debt-equity Ratio

The ratio highlighting the financial mix of equity and debt used in the acquisition of company assets.