What Will Happen to the Required Return on Assets as a Result

question 104

Multiple Choice

What will happen to the required return on assets as a result of changing to a more debt-intensive capital structure?

• A)it will decrease.
• B)it will increase.
• C)it will remain unchanged although individual investor requirements will shift.
• D)the required rates of return for assets, debt holders, and equity holders will all remain constant.

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Definitions:

Human Capital

The abilities, understanding, and practical experiences that an individual or community has, as seen in their economic or valuable contribution to a corporation or state.

Master's Degree

An advanced academic degree granted by universities, typically after completing a bachelor's degree, demonstrating a mastery of a specific field of study or area of professional practice.

Engineering

The application of scientific principles to design, build, and analyze structures, machines, and systems.

Property Acquisition

The process of obtaining ownership or control over a piece of real estate or other property.