Which of the Following Is a Disadvantage to a Business

question 35

Multiple Choice

Which of the following is a disadvantage to a business of using debt to finance its capital projects?

• A) Contributes to the dilution of management control.
• B) Takes longer to acquire than equity financing.
• C) By making the business riskier, contributes to a higher weighted average cost of capital.
• D) Is more expensive than equity financing because of tax considerations.
• E) Reduces the positive impact of leverage in a company with growing earnings.

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Definitions:

Countertransference

A situation where a therapist transfers emotions to a person in therapy, often a reaction to the person's transference, and reflective of the therapist's own unresolved conflicts.

Transference Neurosis

A phenomenon in psychotherapy where patients displace onto their therapists feelings derived from previous significant relationships.

Interpersonal Psychoanalysts

Psychotherapists who focus on the interpersonal relationships of the patient, believing these relationships play a significant role in mental health.

Relational Psychoanalysis

A branch of psychoanalysis that emphasizes the importance of interpersonal relationships in the development and treatment of mental disorders.