Bryan Invested in Bryco Stock When the Firm Was Financed

question 74

Multiple Choice

Bryan invested in Bryco stock when the firm was financed solely with equity.The firm is now utilizing debt in its capital structure.To unlever his position,Bryan needs to

• A)borrow some money and purchase additional shares of Bryco stock.
• B)sell some shares of Bryco stock and loan out the sale proceeds.
• C)sell some shares of Bryco stock and hold the proceeds in cash.
• D)maintain his current position because the firm's use of leverage did not affect him.
• E)sell some of his shares and also borrow money to increase his cash reserves.

---

Definitions:

Game

A structured form of play or competitive activity, often undertaken for enjoyment and sometimes used as a tool in therapy to address psychological issues.

Ulterior Transactions

In transactional analysis, refers to communication exchanges that have a hidden psychological message, differing from the overt social message sent.

Psychological Payoff

The benefit, often unconscious, that individuals derive from maintaining certain behaviors or psychological states.

Transactional Analysis

A psychoanalytic theory and method of therapy wherein social transactions are analyzed to determine the ego state of the communicator as a basis for understanding behavior.