Other Things Held Constant, Which of the Following Events Is

question 45

Multiple Choice

Other things held constant, which of the following events is most likely to encourage a firm to increase the amount of debt in its capital structure?

• A) The costs that would be incurred in the event of bankruptcy increase.
• B) Management believes that the firm's stock has become overvalued.
• C) Its degree of operating leverage increases.
• D) The corporate tax rate increases.
• E) Its sales become less stable over time.

---

Definitions:

Eating Disorder

Mental disorders defined by abnormal eating habits that negatively affect a person's physical or mental health, such as anorexia nervosa, bulimia nervosa, and binge-eating disorder.

Psychoanalysis

A therapeutic technique originally developed by Sigmund Freud that emphasizes exploring unconscious desires and conflicts as a way to understand and treat psychological disorders.

Psychodynamic Therapy

A therapeutic approach emphasizing unconscious processes and past experiences in understanding and treating psychological disorders.

Biological Therapy

The use of physical and chemical procedures to help people overcome psychological problems.