Which of the Following Is NOT a Reason Why Debt

question 45

Multiple Choice

Which of the following is NOT a reason why debt capital is considered to be the least risky source of capital?

• A) It does not normally have to be repaid at a specific future date.
• B) It has a strong legal position.
• C) It has a high priority claim against assets and earnings.
• D) It is a low cost source of capital because interest payments are tax deductible.

Explain the concept, advantages, and limitations of virtual organizations.

Recognize the impact of organizational structure on innovation and organizational agility.

Distinguish between exploration and exploitation in the context of organizational strategy and structure.

Acknowledge the role of autonomy and flexibility in fostering innovation within organizations.

---

Definitions:

Bargained-for Exchange

An essential principle of contract law involving the mutual exchange of promises or consideration between parties entering an agreement.

Legal Sufficiency

The adequacy of evidence or legal grounding in an agreement, claim, or defense that meets minimum legal standards to proceed or withstand scrutiny in a court of law.

Legal Right

An entitlement derived from a legal system that allows or empowers a person to act in a certain way or requires others to interact with the person according to specified rules.

Binding Contract

An agreement between parties that is legally enforceable in a court of law.