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By Issuing Bonds, a Firm's Debt Level Increases, Which May

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By issuing bonds, a firm's debt level increases, which may adversely affect the firm's image in the financial community.


Definitions:

Future Earnings Growth Rate

The projected annual rate at which a company’s earnings are expected to increase, affecting the company's stock price and valuation.

Cash Coverage Ratio

A financial metric that measures a company's ability to cover its interest obligations with its cash flow.

Depreciation Expense

Segmenting the financial outlay of a physical asset across its period of service.

EBIT

A financial performance indicator, earnings before interest and taxes, which omits the costs related to interest and income taxes.

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