As the Amount of a Debt a Firm Uses Increases

question 55

Multiple Choice

As the amount of a debt a firm uses increases,

• A)the expected return on debt increases, but its promised return remains the same.
• B)the cost of debt increases, but the cost of equity remains unchanged.
• C)the costs of both debt and equity increase, but the weighted average cost of capital for the firm remains unchanged.
• D)the costs of both debt and equity increase, which will cause the weighted average cost of capital for the firm to increase.

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Definitions:

Prioritization

The act of arranging or dealing with tasks, problems, or items in order of importance so as to achieve optimal efficiency or outcome.

Externship

A supervised employment experience in a qualified health care facility as part of the educational curriculum.

Practicum

A practical section of a course of study that gives students hands-on experience.

Educational Curriculum

A structured set of educational objectives, content, processes, and resources designed to facilitate learning.