Pessimistic Decision Makers Tend to

question 27

Multiple Choice

Pessimistic decision makers tend to

• A)magnify favorable outcomes.
• B)ignore bad outcomes.
• C)discount favorable outcomes.
• D)A and B
• E)B and C

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Definitions:

Total Value

The combined market value of all the assets owned by an entity.

Optimal Capital Structure

The best mix of debt and equity financing that minimizes a company's cost of capital and maximizes its stock price.

Debt-Equity Ratio

A financial tool measuring the blend of debt and equity financing a company utilizes for its assets.

Bankruptcy Liquidation

The process of selling off a bankrupt company's assets to pay off debts, typically overseen by a liquidator or bankruptcy court.