Debt Financing Is Made Up of Explicit and Implicit Costs

question 48

Multiple Choice

Debt financing is made up of explicit and implicit costs which are:

• A)a higher required ROE and the interest rate bondholders demand, respectively.
• B)the interest rate bondholder's demand and a higher required ROE, respectively.
• C)the costs of equity and debt, respectively.
• D)the costs of issuing bonds and the interest rate bondholders demand, respectively.

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Definitions:

Internally Motivated

Being driven by internal desires and values rather than external rewards or pressures; having personal motivation for actions or beliefs.

Externally Motivated

When an individual's behavior is driven by external rewards such as money, praise, or approval, rather than intrinsic satisfaction or interest.

Eating Behaviors

The patterns or practices of consuming food, including how, when, and what people eat, often influenced by cultural, social, and psychological factors.

Therapeutic Techniques

The methods and strategies used by therapists and counselors to help clients explore their feelings, gain insight, and achieve positive change or coping strategies.