Which One of the Following Statements Concerning Capital Structure Weights

question 45

Multiple Choice

Which one of the following statements concerning capital structure weights is correct?

• A)Target capital structure rates for a firm are irrelevant to individual projects.
• B)The weights are unaffected when a bond issue matures.
• C)An increase in the debt-equity ratio will increase the weight of the common stock.
• D)The repurchase of preferred stock will increase the weight of debt.
• E)The issuance of additional shares of common stock will increase the weight of both the common and preferred stock.

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Definitions:

Moving Toward

A behavior pattern characterized by seeking closeness and attachment to others as a coping strategy.

Neurotic Trend

A pattern of thinking, feeling, and behaving that is dominated by neurotic needs or desires, often leading to maladaptive coping strategies.

Basic Anxiety

A term introduced by psychoanalyst Karen Horney, referring to feelings of helplessness and insecurity that arise from living in a potentially hostile world.

Neurotic Needs

These are emotional needs that can become compulsive and counterproductive, often resulting from attempts to deal with anxiety and insecurity.