Which of the Following Would Increase the Likelihood That a Company

question 34

Multiple Choice

Which of the following would increase the likelihood that a company would increase its debt ratio, other things held constant?

• A) an increase in the corporate tax rate.
• B) an increase in the personal tax rate.
• C) the federal reserve tightens interest rates in an effort to fight inflation.
• D) the company's stock price hits a new low.
• E) an increase in costs incurred when filing for bankruptcy.

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Definitions:

Exports

Exports are goods or services produced in one country and sold to buyers in another country, contributing to a country's economic output.

Inflation Rate

The rate of growth in the general pricing for goods and services, which inversely affects purchasing capacity.

Stock Market

A public market for buying and selling company stocks and securities, facilitating equity investment and price discovery.

Economic Boom

A period of significant economic growth, high employment, and often inflation within an economy.