If a Firm Has Three Times as Much Equity as Debt

question 72

Multiple Choice

If a firm has three times as much equity as debt in its capital structure, then the firm has:

• A)25.0% debt
• B)66.7% equity
• C)40.0% debt
• D)33.3% equity Let x = % of debt
• Then 3x = % of equity
• And 4x = 100% \(\rarr\) x = 25.0%

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Definitions:

Norming

A stage in team development where the team establishes agreements and norms in behavior and operation leading to stronger unity and working efficiency.

Role Agreement

An understanding or official documentation that outlines the duties, responsibilities, and expectations of a specific position or job role.

Storming

The phase in group development where members experience conflicts and polarization as personal agendas emerge.

Cognitive Conflict

Disagreement that focuses on problem- and issue-related differences of opinion.