Debt May Be the Preferred Form of External Financing for Many

question 107

Multiple Choice

Debt may be the preferred form of external financing for many firms because:

• A) most firms already have too much equity.
• B) tax rates on equity are lower.
• C) debt will not adversely affect the firm's financial ratios.
• D)equity issuance is considered by investors to be a negative sign.

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Definitions:

Factorial Design

Factorial design is an experimental design technique that allows the investigation of the effects of two or more independent variables on a dependent variable simultaneously.

Types of ANOVA

Different variations of Analysis of Variance, a statistical method used to compare means across multiple groups, including one-way ANOVA, two-way ANOVA, and repeated measures ANOVA.

Type I Error

The incorrect rejection of a true null hypothesis, also known as a "false positive" finding.