There Are Two Costs of Debt Finance

question 93

True/False

There are two costs of debt finance.The explicit cost of debt is the rate of interest that bondholders demand.But there is also an implicit cost, because borrowing decreases the required rate of return to equity.

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Definitions:

Xenocentrism

The preference for the products, styles, or ideas of someone else's culture over one's own.

Ethnicity

Refers to the ethnic composition of a group or organization.

Pluralism

Refers to a societal structure that allows and encourages multiple groups, cultures, or identities to coexist and have influence.

Diversity Management

Places a much heavier emphasis on recognizing and appreciating differences among people at work and attempting to provide accommodations for those differences to the extent that is feasible and possible.