Reference no: EM132968025
Problem 1: The following statements about the static theory of capital structure are incorrect except
Multiple Choice
A. Firms with low profitabilty should have higher debt ratios.
B. Firms with high profitability should have low debt ratios.
C. All firms should have the same target debt-equity ratio.
D. Firm with lower risk should have a higher amount of debt financing.
E. Firm with higher risk should have higher target debt ratios
Problem 2: The main impact of moving from a classical tax system to an imputation tax system is
A. removal of double taxation of dividends
B. an increase in company taxes
C. decrease in personal capital gains tax
D. an increase in personal taxes
E. increase in personal capital gains tax