Which of the Following Statements Is True Regarding the Trade-Off

question 108

Multiple Choice

Which of the following statements is true regarding the trade-off theory:

• A)target debt ratios are similar among firms in the same industry.
• B)riskier firms tend to rely mostly on debt financing.
• C)riskier firms should have high target debt ratios.
• D)less risky firms ought to have a greater amount of debt financing.

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Definitions:

Network Structure

A network structure links networks of outside suppliers and service contractors to a company’s core functions.

Operating Efficiency

The capability of an organization to deliver products or services in a cost-effective manner while maintaining quality.

Computerised Networking

The use of computer systems and digital technologies to establish connections and facilitate communication between individuals or organizations.

Integration

The process of combining or coordinating separate parts or entities into a unified whole, often used in business strategies or system functionalities.