Which of the Following Makes High-Technology Firms and Service-Based Firms

question 120

Multiple Choice

Which of the following makes high-technology firms and service-based firms risky as restructuring candidates?

• A) They are dependent on human resources.
• B) They have few intangible assets.
• C) Both types of firm rely on financial economies.
• D) The demand for their products is highly sensitive to economic downturns.

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Definitions:

Market Rate

The prevailing interest rate available in the marketplace for securities or loans of a similar risk and maturity.

Corporation's Bonds

Debt securities issued by corporations to raise capital, with the promise to pay back the principal amount along with interest at specified dates.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage.

Premium

The excess of the issue price of bonds over their face amount; the excess of the issue price of stock over its par value.