As the Debt to Equity Ratio Decreases When Debt Is

question 42

Multiple Choice

As the debt to equity ratio decreases when debt is not risk free:

• A)Debt holders demand a higher expected return
• B)Debt holders demand a lower expected return
• C)The expected return on equity increases
• D)The expected return on assets increases

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Definitions:

Potential Savings

The amount of money that could be saved or the reduction in costs that could be achieved under different circumstances or by implementing certain strategies.

Marketing

The collection of activities, organizations, and processes involved in producing, distributing, and promoting goods that provide value to consumers, business partners, and the wider community.

Niche Marketing

A targeted marketing strategy focusing on a specific portion of the market with unique preferences or requirements.

Specialized Needs

Particular requirements or conditions necessary for specific populations, activities, or processes, usually requiring customized solutions.