The Optimal Capital Structure for Firms in Cyclical Industries Should

question 36

Multiple Choice

The optimal capital structure for firms in cyclical industries should contain ________________ than firms in stable industries.

• A) more debt
• B) less debt
• C) an equal amount of debt
• D) There is no relationship between the cyclical nature of an industry and optimal capital structure.

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Definitions:

Expectancy Theory

A motivational theory explaining that an individual's motivation is based on their expectations about their ability to perform tasks and receive desired rewards.

Employee Motivation

How much energy, commitment, and creative thought the workforce of a business displays in their job roles.

Goal Setting

The process of identifying specific, measurable, achievable, relevant, and time-bound objectives that guide the direction and focus of an individual or organization.

Role Perceptions

Individual beliefs about what is expected from them in their role, including their duties, responsibilities, and the scope of their job.