What Is Dependency Theory

question 99

Multiple Choice

What is dependency theory?

• A) the idea that governments should provide a safety net for their citizens
• B) the idea that people of the world should depend on each other
• C) the idea that the expansion of European capitalism created Latin America's underdevelopment
• D) the idea that the rich should allow the poor to depend on their assistance
• E) the idea that people should not allow themselves to become dependent on outside assistance

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Definitions:

Sale of Assets

The process of selling company properties, plant, and equipment to generate cash.

Bondholder Claims

The rights or entitlements that bondholders have to receive payments of principal and interest, as well as their place in the hierarchy of creditors in the event of a default.

Debt/equity Ratio

A ratio used to determine how much of a company's assets are financed through equity versus debt.

Tax Shield

A deduction from taxable income that results in a reduction of taxes owed, often associated with interest expense, depreciation, or other deductions.