Which of the Following Statements Is CORRECT

question 57

Multiple Choice

Which of the following statements is CORRECT?

• A) In general,a firm with low operating leverage also has a small proportion of its total costs in the form of fixed costs.
• B) There is no reason to think that changes in the personal tax rate would affect firms' capital structure decisions.
• C) A firm with a relatively high business risk is more likely to increase its use of financial leverage than a firm with low business risk,assuming all else equal.
• D) If a firm's after-tax cost of equity exceeds its after-tax cost of debt,it can always reduce its WACC by increasing its use of debt.
• E) Suppose a firm has less than its optimal amount of debt.Increasing its use of debt to the point where it is at its optimal capital structure will decrease the costs of both debt and equity.

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Definitions:

Career Counseling

A guidance process that helps individuals understand themselves and the world of work in order to make career, educational, and life decisions.

Occupational Fit

The degree to which a job matches an individual’s interests, abilities, values, and personality, leading to job satisfaction and performance.

Matching

The process of aligning one's interests, skills, and values with suitable career options.

Postmodern Perspective

A philosophical approach that emphasizes the role of language, power relations, and cultural narratives in shaping our understanding of reality.