With the Onset of the Maturity Stage, the Number of Firms

question 37

Multiple Choice

With the onset of the maturity stage, the number of firms in most industries

• A)remains relatively stable.
• B)tends to decrease significantly.
• C)increases significantly.
• D)decreases or increases, depending on the industry.

---

Definitions:

Cost of Debt

The effective rate that a company pays on its current debt, including loans and bonds, which can be measured before or after taxes.

Annual Coupon

The annual interest payment made to bondholders, expressed as a percentage of the bond's face value.

Face Value

The nominal value printed on a bond or stock certificate that indicates the amount due at maturity for bonds or the value of a share of a stock.

After-Tax Cost of Debt

The net cost to a company for borrowing funds after factoring in tax deductions on interest expenses.