How Are High Levels of Gearing Likely to Affect Managers

question 42

Multiple Choice

How are high levels of gearing likely to affect managers' motivation?

• A) The resulting low level of debt discourages managers.
• B) The resulting low level of debt encourages managers to perform better.
• C) The resulting high level of debt discourages managers.
• D) The resulting high level of debt encourages managers to perform better.

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Definitions:

Durable

Capable of withstanding wear, pressure, or damage; made to last.

Power of Attorney

A legal document granting one person the authority to act on behalf of another person in legal or financial matters.

Incapacity

A lack of physical or mental ability to manage one's own affairs or to consent to a specific legal transaction.

Independent Contractors

Individuals or entities contracted to perform work for another entity as a non-employee, often responsible for their own taxes and insurance.