As a Firm Uses Excessive Amounts of Debt Financing

question 25

Multiple Choice

As a firm uses excessive amounts of debt financing,
​1) its debt ratio increases
2) the value of its stock declines
3) its cost of capital increases

• A)​1 and 2
• B)1 and 3​
• C)2 and 3​
• D)1, 2, and 3​

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Opioid Analgesic

A type of medication used to relieve pain by acting on the central nervous system, derived from opiates or synthesized to mimic their effects.

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A type of breakfast food made from the hard outer layers of cereal grains, high in fiber and nutrients.

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A fruit juice made from prunes that is often used for its laxative effects to alleviate constipation.