If a Firm Had the Following Mix of Capital Components

question 2

Multiple Choice

If a firm had the following mix of capital components: its capital structure would be described as:

• A)25% debt and 75% equity
• B)25% debt, 20% preferred stock, and 55% equity
• C)45% debt and 55% equity
• D)both a and b

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Definitions:

Degrees of Freedom

The total number of unique values or amounts that can be given to a statistical distribution.

Effect Size

A quantitative measure of the magnitude of a phenomenon or the strength of the relationship between variables.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, typically set at 0.05 or 5%.

Degrees of Freedom

Represents the number of independent pieces of information available to estimate another piece of information or parameter in a dataset.