JJJ Corp Has $10 Million in Assets and Is Currently

question 87

Multiple Choice

JJJ Corp has $10 million in assets and is currently financed with 100% equity. The firm decides to switch to a 60% equity/40% debt structure and decides to fund the next $4 million of assets for future projects entirely with debt, resulting in the desired capital structure at some point in the future. This is an example of _________________.

• A) Active Capital Structure Management
• B) Separation Principle
• C) Modigliani-Miller Theorem in practice
• D) Passive Capital Structure Management

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Definitions:

Training Budget

The allocation of financial resources dedicated to training and development activities within an organization.

Profit-Sharing

A compensation strategy where employees receive a portion of the company's profits in addition to their regular salary, linking their earnings to the company’s performance.

Flexible Benefit Plans

Employee benefit programs that allow workers to choose from a variety of pre-tax benefits, customized to their personal needs.

Skill-Based Pay

A compensation system where employees are paid based on the skills and qualifications they bring to their job, rather than just their job title or position.