A Firm May Initially Increase Its Use of Debt Without

question 15

True/False

A firm may initially increase its use of debt without increasing the cost of capital.

---

Definitions:

Marbury v. Madison

A landmark Supreme Court case in 1803 that established the principle of judicial review, allowing courts to declare laws unconstitutional.

Articles of Confederation

The original constitution of the United States, ratified in 1781, which was replaced by the current Constitution in 1789 due to its weaknesses.

Federal Court System

The judiciary system of the United States, consisting of the Supreme Court, appellate courts, and district courts.

Commercial Treaties

Agreements between countries that govern the terms of trade, investment, and economic relations.