Which of the Following Statements Is FALSE

question 91

Multiple Choice

Which of the following statements is FALSE?

• A)Given a 35% corporate tax rate,for every $1 in new permanent debt that the firm issues,the value of the firm increases by $0.65.
• B)The firm's marginal tax rate may fluctuate due to changes in the tax code and changes in the firm's income bracket.
• C)Many large firms have a policy of maintaining a certain amount of debt on their balance sheets.
• D)Typically,the level of future interest payments varies due to changes the firm makes in the amount of debt outstanding,changes in the interest rate on that debt,and the risk that the firm may default and fail to make an interest payment.

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Definitions:

House Rule 25

A specific regulation or policy within an organization or institution, often relating to governance or operational procedures, though the content can vary widely depending on the context.

Lobbyists

Individuals or groups hired to influence lawmakers, regulation, or policies in favor of the entity that employs them, often through direct contact or advocacy.

Gifts

Items or funds given without expectation of payment or return, often to show affection, support causes, or provide assistance.

Political Action

Activities aimed at influencing governmental decisions or policies, which can include voting, campaigning, and advocacy efforts.