Kohlberg's Six Stages of Cognitive Moral Development Can Be Reduced

question 33

Multiple Choice

Kohlberg's six stages of cognitive moral development can be reduced to three levels of ethical concern. Persons at the second level

• A)define right as that which conforms to the expectations of good behavior of the larger society.
• B)see beyond the norms, laws, and authority of groups or individuals.
• C)are concerned with their immediate interests and with external rewards and punishments.
• D)are concerned with their long-term interests and with internal rewards and punishments.
• E)are unethical.

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Definitions:

Levered Firm

A company that uses debt (loans or bonds) in addition to equity in its financing structure, often leading to higher risk and potentially higher returns.

M&M Proposition I

A theory in corporate finance suggesting that in a perfect market, the value of a firm is unaffected by how it is financed, regardless of the debt-to-equity ratio.

Unlevered Cost of Capital

The cost of capital for a company that has no debt, reflecting the risk of investing in the company's equity alone.

Firm No Debt

A business that operates without borrowing money or issuing debt instruments.