Firms often have suboptimal capital structures because
A) their managers do not understand the theory of optimal capital structure.
B) some business owners think their firm will never become insolvent.
C) firms are affected differently by bankruptcy and agency costs.
D) some firms do not pay taxes.
E) operating leverage is more important than financial leverage in some firms.
C
Business
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The greater depreciation deduction allowed by the IRS, the:
a) higher before-tax profit, lower after-tax profit b) lower before-tax profit, lower after-tax profit c) higher tax amount; higher after-tax profit d) lower tax amount, lower after-tax profit e) lower tax amount, higher after-tax profit
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All federal fair housing classifications also apply to state fair housing law.
a. true b. false
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