An Implicit Cost of Increasing the Proportion of Debt in a Firm's

question 27

Multiple Choice

An implicit cost of increasing the proportion of debt in a firm's capital structure is that:

• A)the firm's asset beta will increase.
• B)equity holders will demand a higher rate of return.
• C)the tax shield will not apply to the added debt.
• D)the equity-to-value ratio will decrease.

Know the substances that contain THC and their effects.

Understand theories of addiction risk based on social and behavioral contexts.

Appreciate the inherent subjectivity of consciousness and perspectives on experiencing other states of being.

Understand the basic principles and concepts of perception.

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Definitions:

Pleasure Principle

The driving force of the id that seeks immediate gratification of all desires, wants, and needs.

Drive Reduction

A theory in psychology suggesting that behavior is motivated by the desire to reduce internal tension caused by unmet biological needs.

Incentives

Rewards or stimuli that motivate individuals to perform a certain action or exhibit a desired behavior.

Satisfaction

The fulfillment or gratification of a desire, need, or appetite, or the pleasure derived from this fulfillment.