The Present Value of a Perpetual Tax Shield Increases as the Firm's

question 96

Multiple Choice

The present value of a perpetual tax shield increases as the firm's tax rate _____ and as the amount of the debt_____.

• A) increases; increases
• B) increases; decreases
• C) decreases; decreases
• D) decreases; increases

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Definitions:

Omission Training

A learning process where a desired behavior is reinforced by the removal of an undesired outcome.

Stimulus Generalization

This refers to the psychological phenomenon where a response that has been learned to one stimulus is evoked by other, similar stimuli.

Operant Conditioning

A training mechanism in which the degree of a behavior is controlled by the application of rewards or punishments.

Animal

A living organism that feeds on organic matter, typically having specialized sense organs and nervous system and able to respond rapidly to stimuli.