An Acquirer Will Be More Likely to Finance a Takeover

question 47

Multiple Choice

An acquirer will be more likely to finance a takeover using borrowed funds if

• A) Its debt to equity ratio is increasing in the future
• B) Its interest coverage ratio is decreasing in the future
• C) Its interest coverage ratio is increasing and debt to equity ratio is decreasing in the future
• D) Its interest coverage ratio is decreasing and debt to equity ratio is decreasing in the future
• E) Its interest coverage ratio is increasing and debt to equity ratio is increasing in the future

---

Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.