A Firm Should Use as Much Non-Financial Liability Financing as It

question 43

Multiple Choice

A firm should use as much non-financial liability financing as it can if

• A)arbitrageurs can easily and quickly undo choices that are suboptimal.
• B)its risk-adjusted cost of capital is below that of other sources of financing.
• C)there is an operational linkage involved.
• D)None of the above is true; a firm should try to limit the amount of non-financial liability financing it uses.

---

Definitions:

Arrested

The act of legally detaining a person suspected of having committed a crime or offense.

Over Thirty

Refers to individuals or demographic groups that are over the age of thirty years.

Criminal Subcultures

Groups within a society that develop unique sets of norms and values that revolve around criminal activities.

Remorseful

Being remorseful entails feeling deep regret or guilt for a wrong committed, often accompanied by a desire to make amends or seek forgiveness.