Which of the following would likely encourage a firm to increase the debt in its capital structure?
Question:
a. The corporate tax rate increases.
b. The personal tax rate increases.
c. Due to market changes, the firm’s assets become less liquid.
d. Changes in the bankruptcy code make bankruptcy less costly to the firm.
e. The firm’s sales and earnings become more volatile.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 33% (9 reviews)
a An increase in the corporate tax rate would encourage a firm to increase the amount of debt in its ...View the full answer
Answered By
Ehsan Mahmood
I’ve earned Masters Degree in Business Studies and specialized in Accounts & Finance. Couple with this, I have earned BS Sociology from renowned institute of Pakistan. Moreover, I have humongous teaching experience at Graduate and Post-graduate level to Business and humanities students along with more than 7 years of teaching experience to my foreign students Online. I’m also professional writer and write for numerous academic journals pertaining to educational institutes periodically.
4.90+
248+ Reviews
287+ Question Solved
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
Question Posted:
Students also viewed these Corporate Finance questions
-
Which of the following would be expected to give a positive test with Benedicts reagent? Why? (a) D-Galactitol (see structure in margin) (d) D-Fructose (b) L-Arabinose (e) Lactose (c) 1,...
-
Which of the following would not overstate current- period net income? a. Capitalizing an expenditure that should be expensed. b. Failing to record a liability as an expense. c. Failing to record a...
-
Which of the following would not be an appropriate heading for a column in the cash receipts journal? a. Cash b. Accounts Payable c. Sales Discounts d. Sales
-
Kenneth Tully and Toby Benning began a new consulting business on January 1, 2020. They organized the business as a C corporation, KT, Inc. During 2020, the corporation was successful and generated...
-
From an ethical point of view, is there any difference between managers calling subordinates during off hours for work-related questions and sending e-mails or text messages?
-
1). How much will $6000 be worth if it is invested at 3.5% interest for 20 years compounded annually, semi-annually, quarterly, monthly, weekly, daily? (Use Excel dropdown) 2). How much should be...
-
If we have a model for the short rate \(r(t)\), show that (a) the zero coupon bond price can be calculated as: \[P(t, s)=\mathbf{E}_{t}\left[e^{\int_{t}^{s} r(u) d u}...
-
The SEC Form 10-K of Google is reproduced online at www.wiley.com/college/pratt. REQUIRED: Review the 10-K, and answer the following questions: a. What are the major sources of cash for the company...
-
10. Complete the table below (10pts) Trial Acceleration of gravity "g" m/s 1 9.74054 2 9.98976 3 9.70740. 4 9.70398 5 9.67059 CO 6 9.67177 7 9.70358 8 9.64002 9 9.67337 10 9.57659 11. Take the...
-
The North Valley Real Estate data reports information on homes on the market. Use the selling price of the home as the dependent variable and determine the regression equation using the size of the...
-
WIf Congress increased the personal tax rate on interest, dividends, and capital gains but simultaneously reduced the rate on corporate income, what effect would this have on the average companys...
-
Why do public utilities generally use different capital structures than pharmaceutical companies?
-
If the primary key consists of a single column, then a Table in 1NF is automatically in 2NF. (True/False)
-
An investment of \($8,000\) is made at time 0 with returns of \($3,500\) at the end of each of years 1 through 4, with all monetary amounts being in real dollars. Inflation is running 7 percent per...
-
How many brown and green bugs are there in generation 2? Calculate the number of brown and green bugs there are in generations 1 to
-
Rodney Sharp was a fifty-six-year-old dairy farmer whose education did not go beyond the eighth grade. Upon the death of his wife of thirty-two years, Sharp developed a very close relationship with...
-
A dancer leaping into the air and trying for the maximum possible vertical height will move her arms upward as she is pushing off with her legs, putting her arms in rapid upward motion before she...
-
Scientific management was led by Henri Fayol Henry Gantt F.W. Taylor Max Weber
-
The generic strategy typologies developed by Porter and Miles and Snow possess both similarities and differences. True or False
-
Without solving, determine the character of the solutions of each equation in the complex number system. 3x 2 3x + 4 = 0
-
How have the attributes of very high performance systems (a.k.a. supercomputers) changed over the third, fourth, fifth, and sixth generations of computing?
-
Define cash conversion cycle (CCC). Explain why, holding other things constant, a firms profitability would increase if it lowered its CCC.
-
What are the four key factors in a firms credit policy? How would an easy policy differ from a tight policy? Give examples of how the four factors might differ between the two policies. How would the...
-
Indicate using a (+), (-), or (0) whether each of the following events would probably cause accounts receivable (A/R), sales, and profits to increase, decrease, or be affected in an...
-
What is the minimum quantity firms need to sell in order to start earning profit given insurance costs of $50,000, materials o per unit, and break even quantity is 1500?
-
Assume a 10% discount rate and compute the present value of Rs. 1100, Rs.900, Rs.1500 andRs.700 received at the end of 1-4 years In the above sum if the amounts are received at the beginning of the...
-
Recall that an FX rate XXXYYY = Bid/Offer gives the rate of YYY per XXX. You can buy XXX/sell YYY at the offer price and sell XXX/buy YYY at the bid price. EURUSD is trading at 1.4760/1.4763 USDJPY...
Study smarter with the SolutionInn App