The Use of High Levels of Debt in Acquisitions Has

question 58

Multiple Choice

The use of high levels of debt in acquisitions has contributed to:

• A) the increase in above-average returns earned by acquiring firms.
• B) an increased risk of bankruptcy for acquiring firms.
• C) the confidence of the stock market in firms issuing junk bonds.
• D) an increase in investments that have long-term payoffs.

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Definitions:

Reproduce

The biological process by which living organisms produce offspring, either sexually or asexually.

Generalization

The process of applying information or conclusions from specific instances to broader contexts or general situations.

CR

A term that stands for conditioned response, which is an automatic response established by training to an ordinarily neutral stimulus.

CS

Often used as an abbreviation for Computer Science, a field of study that encompasses the theory, experimentation, and engineering that form the basis for the design and use of computers.