The Optimal Capital Structure Will Tend to Include More Debt

question 25

Multiple Choice

The optimal capital structure will tend to include more debt for firms with:

• A)the highest depreciation deductions.
• B)the lowest marginal tax rate.
• C)substantial tax shields from other sources.
• D)lower probability of financial distress.
• E)less taxable income.

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Definitions:

Aphasia

A disorder of language, thought to have neurological causes, in which language production and/or language reception are disrupted.

Agnosia

A disorder characterized by the inability to recognize and identify objects, people, or sounds, despite having intact sensory function, usually resulting from brain injury or disease.

Amnesia

A deficit in memory caused by brain damage, disease, or psychological trauma, where the individual is unable to recall past experiences or learn new information.

Speech Error Studies

Research examining the errors made during speech as a way to understand how language is processed in the brain.