Which of the Following Is Correct

question 73

Multiple Choice

Which of the following is correct?

• A) The smaller the acid ionization constant is, the more the acid ionizes and the stronger the acid.
• B) The larger the acid ionization constant is, the less the acid ionizes and the weaker the acid.
• C) The smaller the acid ionization constant is, the less the acid ionizes and the weaker the acid.
• D) The smaller the acid ionization constant is, the less the acid ionizes and the weaker its conjugate base is.
• E) The smaller the acid ionization constant is, the more the acid ionizes and the weaker the acid.

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Definitions:

Financial Distress Costs

Expenses that a company may incur when it is facing financial problems, which can include legal fees, restructuring costs, and loss of reputation.

Static Theory of Capital Structure

A theory that proposes there is an optimal capital structure for a company where the cost of capital is minimized, and the value of the firm is maximized.

Tax Benefit

A reduction in tax liability achieved through claiming allowable deductions such as expenses, exemptions, and credits.

Financial Distress

A situation where a company is unable to meet its financial obligations, which can lead to bankruptcy if not addressed.