Using More Debt in the Firm's Capital Structure

question 12

Multiple Choice

Using more debt in the firm's capital structure

• A) decreases the probability of filing for bankruptcy.
• B) raises the riskiness of the firm's earnings stream.
• C) generally leads to a lower expected rate of return.
• D) none of the above.

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Definitions:

Social Media

Digital platforms and technologies that enable users to create, share, or exchange information, ideas, pictures/videos in virtual communities and networks.

PR Potential

The capacity or possibility for developing public relations initiatives to improve an organization's image and relationships with the public.

Corporate Social Responsibility

A business strategy where firms incorporate considerations related to society and the environment into their operational activities and stakeholder engagements.

Stakeholders

Individuals, groups, or organizations that have an interest or concern in a business or project and can be affected by its outcomes.