"Newman's Own" Is a Food Product Line That Gives 100

question 12

Multiple Choice

"Newman's Own" is a food product line that gives 100 percent of its after-tax profits to charity.This company is practicing ________.

• A) business ethics
• B) social responsibility
• C) customer satisfaction
• D) creativity

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Definitions:

Capital Structure

The mix of debt and equity financing a company uses to fund its operations and growth.

M&M Proposition II

Modigliani and Miller's Proposition II states that a company's cost of equity increases as it increases its leverage due to the risk premium on equity.

Debt-Equity Ratio

A financial ratio that measures the relative proportion of shareholders' equity and debt used to finance a company's assets.

Financial Risk

The chance of incurring a loss in capital in an investment or business operation.