Which of the Following Correctly Relates to Levels of Gearing

question 3

Multiple Choice

Which of the following correctly relates to levels of gearing, financial distress, and the cost of capital?

• A) At low gearing, distress risks are low but the cost of capital is high.
• B) At low gearing, distress risks are high and the cost of capital is high.
• C) At high gearing, distress risks are low but the cost of capital is high.
• D) At high gearing, distress risks are high and the cost of capital is high.

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Definitions:

Coping Strategies

Techniques or methods that individuals use to deal with stress, trauma, or hardship.

Chronic Illness

A long-lasting health condition that can be controlled but not cured, often requiring ongoing medical attention and management.

Active Coping

Involves consciously making efforts to solve personal and interpersonal problems, thus reducing or managing stress.

Emotional Coping

Strategies or mechanisms individuals use to manage, endure, or adapt to emotional stress and challenges.