A Firm in a Cyclical Industry Should Use

question 76

Multiple Choice

A firm in a cyclical industry should use

• A) a large amount of debt to lower the cost of capital.
• B) no debt at all.
• C) preferred stock in place of debt.
• D) a limited amount of debt to lower the cost of capital.

---

Definitions:

Interchangeable Terms

Phrases or words that can be used in place of each other due to their similar meanings within specific contexts.

Coercive Power

The extent to which a manager can deny desired rewards or administer punishment to control other people.

Extrinsic Rewards

Valued outcomes given by some other person.

Intrinsic Rewards

Intrinsic rewards are valued outcomes received directly through task performance.