Which of the Following Statements Is CORRECT, Holding Other Things

question 2

Multiple Choice

Which of the following statements is CORRECT, holding other things constant?

• A) an increase in the personal tax rate is likely to increase the debt ratio of the average corporation.
• B) if changes in the bankruptcy code make bankruptcy less costly to corporations, then this would likely reduce the debt ratio of the average corporation.
• C) an increase in the company's degree of operating leverage is likely to encourage a company to use more debt in its capital structure.
• D) an increase in the corporate tax rate is likely to encourage a company to use more debt in its capital structure.
• E) firms whose assets are relatively liquid tend to have relatively low bankruptcy costs, hence they tend to use relatively little debt.

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Definitions:

Androgynous

Possessing or exhibiting both traditionally masculine and traditionally feminine qualities, traits, or characteristics.

Feminine

Relating to qualities or attributes regarded as characteristic of women or girls.

Androgynous

Describing a person or trait that has both masculine and feminine characteristics, challenging traditional gender roles.

Androgyny Scale

A measure used to assess the presence of both masculine and feminine characteristics in individuals.