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Julian and Meghan Are Discussing Several Theories They Have Found

question 67

Multiple Choice

Julian and Meghan are discussing several theories they have found that offer explanations for why children become bullies in schools.Julian is not sure how to sift through all the theories because they all seem equally convincing.Meghan suggests that they go with the explanation that is the simplest.Meghan's decision are made based on____.


Definitions:

Capital

Financial resources or assets owned by a business or individual that are useful in furthering development and generating income.

Debt

An amount of money borrowed by one party from another, under the condition of repayment with interest.

Interest Tax Benefit

The financial advantage gained through deducting interest payments on debt from taxable income.

MM Model

Modigliani-Miller Model; a theory on capital structure that suggests the market value of a firm is determined by its earning power and the risk of its underlying assets.

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