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

question 128

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:

Dramatic Personality Disorders

A cluster of disorders characterized by dramatic, emotional, or erratic behavior, including borderline, narcissistic, histrionic, and antisocial personality disorders.

Borderline

Pertaining to or characteristic of a borderline personality disorder, a mental health condition marked by unstable moods, behaviors, and relationships.

Narcissistic

Relating to narcissism, which involves excessive interest in or admiration of oneself and one's physical appearance.

Supertraits

Broad personality factors that encompass a range of more specific traits or behaviors.