e effect of financial distress and taxation on​ gearing?   A. Both constrain gearing   B. The tax constrains​ gearing; financial distress pushes for increased gearing   C. The tax pushes for increased​ gearing; financial distress constrains gearing   D. Both push for increased gearing

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter1: An Introduction To Taxation And Understanding The Federal Tax Law
Section: Chapter Questions
Problem 34DQ
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1.

What is the effect of financial distress and taxation on​ gearing?

 

A.

Both constrain gearing

 

B.

The tax constrains​ gearing; financial distress pushes for increased gearing

 

C.

The tax pushes for increased​ gearing; financial distress constrains gearing

 

D.

Both push for increased gearing

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