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    Debt Ratio

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    Which of the following is likely to encourage a company to raise its target debt ratio

    1. an increase in corporate tax rate
    2. an increase in the personal tax rate 3an increase in the company's operating leverage
    4. statements 1 and 3 5 all of the statements

    © BrainMass Inc. brainmass.com October 1, 2020, 8:14 pm ad1c9bdddf

    Solution Preview

    Answer 1 - an increase in corporate tax rate.

    The interest paid is tax ...

    Solution Summary

    The solution explains why a company would increase the debt ratio