The Decision to Issue Debt Rather Than Additional Shares of Stock

question 60

Multiple Choice

The decision to issue debt rather than additional shares of stock is an example of:

• A) Working capital management.
• B) A net working capital decision.
• C) Capital budgeting.
• D) A controller's duties.
• E) Capital structure decision.

---

Definitions:

Long-Run Supply Curve

A graphical representation showing the relationship between market prices and the amount of output that firms are willing to supply in the long run.

Industry Expansion

The process of an industry growing in size, output, or number of participants, often through increased demand or technological advancements.

Decreasing-Cost Industry

An industry where the average cost of production decreases as the industry grows and output increases, often due to economies of scale.

Demand Occurs

The moment at which consumers are willing and able to purchase a good or service at a given price.