Which of the Following Statements Is Correct

question 105

Multiple Choice

Which of the following statements is correct?

• A) Increasing the amount of firm debt increases both the expected cash flows to equity holders and the number of shares outstanding.
• B) Increasing the amount of firm debt increases both the expected cash flows to equity holders and the amortization.
• C) Increasing the amount of firm debt increases both the expected cash flows to equity holders and the volatility of those cash flows.
• D) Increasing the amount of firm debt increases both the expected cash flows to equity holders and the tax liability.

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Definitions:

Mood-stabilizing Drug

Medications used primarily to treat mood disorders and prevent swings between mania and depression.

Lobotomy

A surgical procedure that involves severing connections in the brain's prefrontal lobe.

Nobel Prize

A set of international awards given annually in several categories including Physics, Chemistry, Medicine, Literature, Peace, and Economic Sciences, recognizing significant contributions.

Moniz

António Egas Moniz, a Portuguese neurologist who is credited with developing the technique of prefrontal leucotomy, for which he shared the Nobel Prize in Physiology or Medicine in 1949.