Which of the Following Is a Good Reason for a Company

question 92

Multiple Choice

Which of the following is a good reason for a company to have higher than average debt ratios?

• A) The company's cash flows are difficult to predict.
• B) The company generates little taxable income.
• C) Customer support is an important aspect of the company's business.
• D) The company faces high marginal tax rates.

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Definitions:

Motivating Commitment

The process of encouraging individuals to remain dedicated and persist in their engagement with tasks or goals.

Leading

The act of guiding or influencing others to achieve organizational or group goals through motivation and leadership skills.

Resources

Assets, materials, and inputs required by an organization or individual to achieve objectives.

Legitimate Power

is a type of authority that is recognized and accepted by members of an organization, stemming from a formal position or role.