A Decrease in the Possible Range of Percentage Stock Returns

question 22

Multiple Choice

A decrease in the possible range of percentage stock returns can be achieved by:

• A) a decrease in the firm's financial leverage.
• B) an increase in the firm's asset risk.
• C) an increase in the firm's business risk.
• D) a decrease in the firm's debt beta.

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Definitions:

External Locus

A belief that outcomes in one's life are controlled by external forces rather than by one's own actions.

Information Filtering

The process of screening, selecting, and presenting information selectively, often to reduce information overload or to emphasize certain aspects.

Persuasive Communication

The practice of using messages designed to influence or change the attitudes, beliefs, or behaviors of others.

Polycentric

Having multiple centers of power or influence, often used in the context of international business to describe a strategy that treats each market as unique.