What Is Accretion

question 59

Multiple Choice

What is accretion?

• A)the adding of material to an object an atom or molecule at a time
• B)the adding of material to an object by collection of solid particles
• C)the release of gas from rocks as they are heated
• D)the removal of material from asteroids by the bombardment of the solar wind

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Definitions:

M&M Proposition II

A theory by Modigliani and Miller that suggests the cost of equity is a linear function of the company's debt/equity ratio, under a no-tax environment.

Financial Risk

The possibility of losing money on an investment or business venture due to various financial factors.

Return on Assets

An indicator of how profitable a company is relative to its total assets, calculated as net income divided by total assets.

M&M Proposition II

A theory proposing that the value of a firm is unaffected by its capital structure, assuming no taxes and that investment returns are required to increase with leverage.