Which of the Following Statements Is Correct

question 93

Multiple Choice

Which of the following statements is correct?

• A) For the most part,our federal tax rates are progressive,because higher incomes are taxed at higher average rates.
• B) Bonds issued by a municipality such as the city of Miami would carry a lower interest rate than bonds with the same risk and maturity issued by a private corporation such as Florida Power & Light.
• C) Our federal tax laws tend to encourage corporations to finance with debt rather than with equity securities.
• D) Our federal tax laws encourage the managers of corporations with surplus cash to invest it in stocks rather than in bonds.However,other factors may offset tax considerations.
• E) All of the above statements are true.

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Definitions:

Total Asset Turnover

A financial gauge assessing how well a company employs its assets to create sales turnover.

Cash Dividend

A payout in cash form from a corporation's profits to the individuals holding its shares.

Stockholders' Equity

Stockholders' equity represents the ownership interest of shareholders in the assets of a corporation, after deducting liabilities.

Net Profit Margin Ratio

A profitability metric that calculates the percentage of revenue remaining as profit after all expenses are deducted from total sales.