Which of the Following Statements Is True

question 21

Multiple Choice

Which of the following statements is true?

• A) The use of debt may lead to financial distress and bankruptcy, thus firms that sell expensive, durable products that may have warranties and ongoing service requirements tend to use less debt.
• B) The use of debt may lead to financial distress and bankruptcy, thus firms that sell expensive, durable products that may have warranties and ongoing service requirements tend to use more debt.
• C) Companies with a large proportion of tangible assets should be more willing to use debt than firms with mostly intangible assets.
• D) Companies with a large proportion of tangible assets should be less willing to use debt than firms with mostly intangible assets.
• E) Both (a) and (c)

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Definitions:

Fair Deal

A set of proposals put forward by U.S. President Harry S. Truman to Congress in 1949 aimed at improving social welfare and civil rights.

Harry S. Truman

The 33rd President of the United States, serving from 1945 to 1953, known for implementing the Marshall Plan and leading the country through the end of World War II.

Federal Health Insurance

A government-provided insurance scheme designed to offer health coverage to citizens, typically funded through taxes, examples include Medicare and Medicaid in the United States.

Bracero Program

A series of agreements between the United States and Mexico, allowing Mexican laborers to work temporarily in the U.S. agricultural sector from 1942 to 1964.