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Maureen Fauble Is Director of Career Services at a Major

question 127

Multiple Choice

Maureen Fauble is director of career services at a major Midwestern university and works with corporations who are seeking to recruit recent college graduates. Maureen is interested in attracting DePuyOrthopaedics, Inc., a division of Johnson & Johnson, to recruit entry-level marketing and sales representatives. Maureen has received very favorable word-of-mouth communication from alumni about DePuyOrthopaedics, and employees are extremely satisfied with the company's culture and feel empowered to make decisions. In addition, they report that they are given a high degree of flexibility and autonomy, which enables them to quickly respond and adapt rapidly to changing customer needs. It's likely that DePuyOrthopaedics has implemented a ____________ organizational structure.

Definitions:

Levered Cost of Capital

The cost of capital for a company that has debt in its capital structure, reflecting the additional risk introduced by the use of debt.

Debt-equity Ratio

A gauge for the relative amounts of shareholders' equity and debt in a company's asset financing approach.

Interest Tax Shield

The reduction in income taxes that results from taking the allowable interest expense deductions from taxable income.

Financial Distress Costs

Expenses incurred by a firm facing financial difficulties, including legal, administrative, and potentially bankruptcy-related costs.