Question
The ratio of debt to this quantity is a measure of a company’s financial leverage. For 10 points each:
[10m] Name this quantity. Broadly, companies can be financed either by taking on debt or by increasing this quantity by selling shares.
ANSWER: equity [accept debt-to-equity ratio]
[10e] Debt is often said to be cheaper than equity because interest payments on debt can be deducted from one’s income, lowering the amount of these fees paid to the IRS.
ANSWER: taxes [or income taxes]
[10h] In a taxless world, debt and equity financing are equivalent by a theorem named for Merton Miller and an economist from this country. Competitive markets achieve a condition named for an economist from this country by the first welfare theorem.
ANSWER: Italy [or Italia; accept the Italian Republic or Kingdom of Italy] (The economists are Franco Modigliani and Vilfredo Pareto; the first welfare theorem states that competitive markets are Pareto efficient.)
<Vincent Du, Social Science - Economics> ~23227~ <Editor: Vincent Du>
Data
Summary
| Tournament | Edition | Exact Match? | Heard | PPB | Easy % | Medium % | Hard % |
|---|---|---|---|---|---|---|---|
| 2024 PACE NSC | 06/08/2024 | Y | 36 | 15.56 | 100% | 17% | 39% |