Everything Else Equal, and for One Particular Firm, in Which

question 11

Multiple Choice

Everything else equal, and for one particular firm, in which of the following capital structures would the common stockholders have to bear the greatest amount of of business risk?

• A)100 percent equity
• B)25 percent equity and 75 percent debt
• C)50 percent equity and 50 percent debt
• D)1 percent equity and 99 percent debt
• E)75 percent equity and 25 percent debt

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Definitions:

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Statistical Consultant

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A mathematical representation that illustrates the link between inputs in production and the outcome produced.