Even If It Is Riskier to Issue Debt, Most Companies

question 85

Multiple Choice

Even if it is riskier to issue debt, most companies still choose to do this because

• A) money that is borrowed increases earnings per share.
• B) it produces a higher return on equity.
• C) it does not affect shareholder control.
• D) all of the above are correct.

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Definitions:

Conditioned Fear

A learned response to a previously neutral stimulus that, after being associated with an aversive event, triggers a fear reaction.

Abusive Behaviour

This term refers to actions that intentionally harm or control another person, often manifesting in physical, emotional, sexual, or psychological abuse.

Descriptive Norms

Refer to perceptions of how people typically behave in a given context, which can influence individual behavior by setting a standard of what is common or normal.

Injunctive Norms

Social norms that dictate what is perceived as approved or disapproved behavior within a given culture or social group.