All Else Constant,which of the Following Will Increase the Aftertax

question 98

Multiple Choice

All else constant,which of the following will increase the aftertax cost of debt for a firm?
I.Increase in the yield to maturity of the firm's outstanding debt
II.Decrease in the yield to maturity of the firm's outstanding debt
III.Increase in the firm's tax rate
IV.Decrease in the firm's tax rate

• A)I only
• B)I and III only
• C)I and IV only
• D)II and III only
• E)II and IV only

---

Definitions:

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price in a market.

Market

An economic system or environment where buyers and sellers interact to exchange goods and services for money or barter.

Merit Raise

A salary increase awarded to employees based on their job performance.

High Performers

Refers to individuals or groups who consistently achieve outstanding results and surpass standard expectations in their work or responsibilities.