Which of the Following Plays an Important Role in Determining

question 35

Multiple Choice

Which of the following plays an important role in determining the capital structure of a firm?

• A) Managerial attitudes
• B) Reserve borrowing capacity
• C) Shareholders' expectations
• D) Asymmetric information
• E) Bankruptcy-related costs

---

Definitions:

Voting Paradox

The voting paradox, or Condorcet paradox, illustrates a situation in a voting system where collective preferences can be cyclic, even if the individual preferences are non-cyclical.

Voter Failure

A situation where voters make an uninformed or poor choice, often due to lack of information or misleading information, that does not align with their interests.

Negative Externalities

Costs or disadvantages suffered by a third party due to an economic transaction that they are not directly involved in.

Economic Efficiency

A state in which resources are allocated in a way that maximizes the production of goods and services at the least cost and minimum waste.