In Examining the Question as to Whether or Not Capital

question 4

Multiple Choice

In examining the question as to whether or not capital structures are randomly selected,we generally find that:

• A) capital structures show strong industry patterns.
• B) within industries,the most profitable companies borrow the least.
• C) corporate and personal income taxes influence capital structures,but taxes alone cannot explain differences in leverage across firms,industries or countries.
• D) shareholders consider leverage-increasing events to be "good news" and leverage-decreasing events to be "bad news."
• E) All of the above

---

Definitions:

Takeover Bid

In corporate law, the offer to buy the voting stock of a corporation.

Friendly Suitor

An entity or person who proposes a takeover or merger that is welcomed by the target company's board.

Legal Implications

The possible legal consequences or effects that actions or decisions can have, potentially influencing rights, duties, or liabilities.

Aggregate Worth

The total value of all assets owned by an individual, company, or entity, calculated by summarizing their individual values.