Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Firms with less stringent capital constraints have more flexibility in funding their pension plans, which could result in a higher funding ratio. A high marginal tax rate may incentivize firms to contribute more to their pension plans, resulting in a higher funding ratio. The short-term pension risk ratio is calculated by dividing the market value of plan assets by the projected benefit obligation, not the market value of common stock. The funded status of a pension plan can provide insight into potential cash flow problems, as a large unfunded liability could put strain on a firm's finances.

Which of the Following Statements Is Correct