When a Corporation Issues Permanent Debt, the Value of All

question 68

Multiple Choice

When a corporation issues permanent debt, the value of all its securities:

• A) increases by the present value of the tax shield.
• B) decreases by the present value of the tax shield.
• C) increases by the annual interest tax shield.
• D)decreases by the annual interest tax shield.

---

Definitions:

Performance Appraisal

The formal assessment of an employee's job performance, identifying areas of strengths and opportunities for improvement.

Wrongful Discharge

The unlawful termination of an employee's contract of employment against the law or the terms specified in the contract.

Management by Objectives

A management strategy in which employees and managers collaborate to set, monitor, and achieve specific objectives.

Specific Objectives

Clearly defined targets that an organization or individual aims to achieve, often within a set timeframe.