Identify the Country Whose Accounting Practices Have Not Been Influenced

question 42

Multiple Choice

Identify the country whose accounting practices have not been influenced by the U.S.accounting system.

• A)Canada
• B)Mexico
• C)Philippines
• D)Germany

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Definitions:

M&M Proposition I

A principle of corporate finance stating that the value of a firm is unaffected by how it is financed, in the absence of taxes, bankruptcy costs, and asymmetric information.

Interest Tax Shield

The reduction in income taxes that results from taking allowable deductions for interest expenses.

Capital Structure

The mix of different forms of external financing used by a company, including debt, equity, and hybrid securities.

Tax Shield

The decrease in income tax liability achieved by subtracting permissible deductions like mortgage interest or depreciation from one's taxable income.