Which of the Following Statements Is Correct

question 57

Multiple Choice

Which of the following statements is correct?

• A)In general, a firm with low operating leverage also has a small proportion of its total costs in the form of fixed costs.
• B)There is no reason to think that changes in the personal tax rate would affect firms' capital structure decisions.
• C)A firm with high business risk is more likely to increase its use of financial leverage than a firm with low business risk, assuming all else is equal.
• D)If a firm's after-tax cost of equity exceeds its after-tax cost of debt, it can always reduce its WACC by increasing its use of debt.

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Planning Graphic

A visual representation used in the planning stage of a project or presentation to organize ideas and information.

Audience

The group of individuals for whom a piece of writing or other form of communication is intended or by whom it is consumed.

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Guidelines or standards for how a document should be organized, including its layout, typography, and citation style.

Clear Graphic

A visual element designed for easy and immediate comprehension, presenting information or data unambiguously.