A High Level of Debt Can Be a Positive Force

question 69

Multiple Choice

A high level of debt can be a positive force because it allows firms to

• A) take advantage of expansion opportunities.
• B) postpone unnecessary investments.
• C) invest in tax avoiding ventures.
• D) discipline their managers.

---

Definitions:

Deductive Reasoning

A logical process where a conclusion follows necessarily from the stated premises, moving from the general to the specific.

Concept

Any abstract characteristic or attribute that has the potential to be measured.

Indicator Variables

Variables, often used in statistical models, that take on a value of 0 or 1 to indicate the absence or presence of a categorical effect that may impact the result.

Validity

The degree to which an indicator accurately measures or reflects a concept.