It Is Unattractive to Borrow Any Further Funds When

question 44

Multiple Choice

It is unattractive to borrow any further funds when:

• A)the average borrowing costs start to equal or exceed the ROE.
• B)the average borrowing costs start to equal or exceed the ROA.
• C)the company's net profit margin falls below the average borrowing costs.
• D)the company's debt-to-equity ratio exceeds 50%.

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Definitions:

Mimicked Behavior

Refers to behavior that is imitated or copied from another person.

Hostile Intentions

Feelings or desires to cause harm or express aggression towards others.

Social Information Processing

The way individuals understand and use social information to make judgements and decisions in interpersonal situations, considering the context, social cues, and norms.

Incorrectly Assumed

Believing something to be true without sufficient evidence or despite evidence to the contrary.