The Chancellor of a Major University Was Concerned About Alcohol

question 10

Multiple Choice

The chancellor of a major university was concerned about alcohol abuse on her campus and wanted to find out the proportion of students at her university who visited campus bars on the weekend before the final exam week. Her assistant took a random sample of 250 students. The total number of students in the sample who visited campus bars on the weekend before the final exam week is an example of

• A) a discrete random variable.
• B) a parameter.
• C) a continuous random variable.
• D) a categorical random variable.

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Definitions:

Interest Tax Shield

The reduction in income taxes that results from the deductibility of interest expense from taxable income.

Capital Structure

The mix of debt and equity financing a company uses for its operations and growth.

Optimal Capital Structure

Optimal capital structure is the mix of debt, equity, and other financing sources that minimizes a firm's cost of capital and maximizes shareholder value, balancing risk and return.

Financial Distress

A situation where a company cannot meet or has difficulty paying off its financial obligations to creditors, often leading to bankruptcy or restructuring.