What Does the Phrase "Stare Decisis" Mean

question 4

Multiple Choice

What does the phrase "stare decisis" mean?

• A) "Let the master answer"
• B) "The Law speaks for itself"
• C) "It stands decided"
• D) "To hold the body"

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Definitions:

M&M Value

Refers to Modigliani and Miller's theory on the irrelevance of capital structure for determining a firm's market value under certain conditions.

Financial Distress Costs

Expenses that a company may incur when it is facing financial problems, which can include legal fees, restructuring costs, and loss of reputation.

Static Theory of Capital Structure

A theory that proposes there is an optimal capital structure for a company where the cost of capital is minimized, and the value of the firm is maximized.

Tax Benefit

A reduction in tax liability achieved through claiming allowable deductions such as expenses, exemptions, and credits.