Which of the Following May Be True Concerning Debt and Equity

question 81

Multiple Choice

Which of the following may be true concerning debt and equity?

• A) The cost of debt for Firm A is greater than the cost of equity for Firm A.
• B) The cost of debt for Firm A is greater than the cost of equity for Firm B.
• C) The cost of internally generated equity for Firm A is greater than the cost of externally generated equity funds for Firm A.
• D) The cost of internally generated equity for Firm A is less than the cost of debt for Firm A.
• E) None of the above could be true.

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Definitions:

Environmental Harm

Damage caused to the natural environment, often due to human activity, impacting ecosystems, biodiversity, and human health.

Wrongful Dismissal

Termination of employment that breaches the terms of the contract or employment law, resulting in legal liability.

Severance Pay

Payment given to an employee when they are terminated, typically based on how long they have worked for the company.

Discretionary Bonuses

Bonus payments made at the discretion of employers, typically not guaranteed and based on performance, profitability, or other criteria.