Which of These Makes the Following a True Statement? Diversification

question 96

Multiple Choice

Which of these makes the following a true statement? Diversification resulting from a merger can:

• A) make the debt of the merged firm more risky, thus lowering the cost of capital.
• B) make the debt of the merged firm less risky, thus lowering the cost of capital.
• C) make the debt of the merged firm less risky, thus raising the cost of capital.
• D) None of the options make the statement true.

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Definitions:

Article 2(A)

A specific portion of the UCC that deals with leases of personal property.

Lease Contracts

Legal documents outlining the terms under which one party agrees to rent property owned by another party, specifying duration, payment schedules, and other conditions.

UCC

An all-encompassing series of legal guidelines for managing commercial transactions in the United States is provided by the Uniform Commercial Code.

Confirmation Letter

A document sent to confirm details of an agreement, appointment, or transaction.