The Presence of a Large Amount of Debt Can Encourage

question 95

Multiple Choice

The presence of a large amount of debt can encourage shareholders to take excessive risk becaus?

• A) debt holders are risk seeking.
• B) firm value increases with risk taking.
• C) equity holders are risk seeking by nature.
• D) the costs of failure are borne largely by debt holders.

---

Definitions:

Level Of Confidence

A statistic that quantifies the degree of certainty or trust in a sampling method’s estimate of the population parameter.

Stratified Random Sampling

A sampling method that involves dividing a population into smaller groups, or strata, and randomly selecting participants from each stratum.

Cluster Sampling

A sampling technique where the population is divided into clusters, and a random sample of these clusters is selected for study.

Numerical Composition

The arrangement or structure of numbers or quantities within a particular domain or dataset.