The Use of Debt in the Firm's Capital Structure Will

question 119

Multiple Choice

The use of debt in the firm's capital structure will increase ROE if the firm:

• A)Has more debt than equity
• B)Pays less in taxes than in interest
• C)Earns a higher return than the rate paid on debt
• D)Has a times interest earned greater than 1.0

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Definitions:

Competencies

Defines a set of skills, knowledge, behaviors, or abilities that are essential in effectively performing tasks or roles.

Force-Field Analysis

A management technique developed by Kurt Lewin to analyze the forces for and against a change, helping to identify what needs to be modified for successful implementation.

Change Management

The systematic approach to dealing with change, both from the perspective of an organization and the individual, involving adapting to, controlling, and effecting change.