An Increase in a Corporation's Tax Rate Will Cause

question 39

Multiple Choice

An increase in a corporation's tax rate will cause:

• A) an increase in an unlevered firm's return on assets.
• B) a decrease in a levered firm's WACC.
• C) an increase in a levered firm's cost of debt.
• D) a decrease in an unlevered firm's cost of equity.

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Definitions:

Work Experience

Practical exposure to and involvement in a specific job or industry, which helps build skills and expertise.

Productivity

the efficiency of production of goods or services, often measured by the output per unit of input.

Business Units

Distinct parts of an organization, defined by market, geography, product, or service, each with its own strategy and a degree of independence from the larger organization.

Organizational Empowerment

The process of granting employees greater autonomy, authority, and control over their work to increase engagement and productivity.