Which of the Following May Be True Concerning Debt and Equity

question 81

Multiple Choice

Which of the following may be true concerning debt and equity?

• A) The cost of debt for Firm A is greater than the cost of equity for Firm A.
• B) The cost of debt for Firm A is greater than the cost of equity for Firm B.
• C) The cost of internally generated equity for Firm A is greater than the cost of externally generated equity funds for Firm A.
• D) The cost of internally generated equity for Firm A is less than the cost of debt for Firm A.
• E) None of the above could be true.

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Definitions:

Sensitization

An increased reactivity to all environmental events following exposure to an intense stimulus.

Behavioral Contrast

A phenomenon in which a change in the reinforcement conditions of one behavior leads to an opposite change in the rate of another behavior.

Opponent Process

A theory suggesting that emotions are regulated by mechanisms that operate in opposing pairs.