Zoe Just Learned That She Did Not Get into the College

question 122

Multiple Choice

Zoe just learned that she did not get into the college of her choice. She comes upon Alec, a resident of a nearby neighborhood and one that most outsiders find distasteful. It is likely that the news Zoe just received will cause her to judge Alec more ____, making her feel ____ about herself.

• A) positively; worse
• B) negatively; worse
• C) positively; better
• D) negatively; better

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Definitions:

Sensitivity of EPS

The degree to which a company's earnings per share (EPS) is affected by fluctuations in its operating income.

ROE

A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.

Target Capital Structure

The optimal mix of debt, preferred stock, and common equity that a company aims to maintain for financing its operations.

Debt-equity Ratio

A gauge of how shareholders' equity and debt proportionately finance a company’s assets.