Changing the Capital Structure by Adding Debt Will Not

question 81

Multiple Choice

Changing the capital structure by adding debt will not:

• A)Increase the return that shareholders require
• B)Leave the WACC unaffected
• C)Decrease debt holder risk
• D)Increase the cost of debt

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Definitions:

Maladaptive Beliefs

Negative thought patterns that are counterproductive or harmful to one’s psychological well-being and functioning.

Major Depression

A psychiatric condition expressed by continuing depression or a loss of interest in leisure activities, significantly detracting from daily life quality.

Eclectic

Combining ideas, styles, or techniques from a diverse range of sources.

Electroconvulsive Shock Therapy (ECT)

A medical treatment most commonly used for severe depression, involving the induction of a controlled seizure in the patient through electrical currents transmitted to the brain.