Which of the Following Statements About Debt Is True

question 60

Multiple Choice

Which of the following statements about debt is true?

• A) Increasing debt increases the firm's flexibility.
• B) As debt increases, distress costs decrease.
• C) Using debt causes a loss of ownership by the firm.
• D) Using debt allows the firm to earn money using someone else's money.
• E) As the level of debt increases, the firm's credit rating begins to matter less.

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Definitions:

Event Recording

A method used in behavioral observation where instances of a specific behavior or event are recorded as they occur.

Interval Recording

A method of behavioral observation that involves recording the presence or absence of a behavior within specific time intervals.

Scapegoat

The practice of singling out any party for unmerited negative treatment or blame.

Negative Attention

Undesirable or adverse focus or scrutiny that can lead to harmful or detrimental effects.