The Two Main Factors That Determine a Firm's Capital Structure

question 26

Multiple Choice

The two main factors that determine a firm's capital structure are ____________________.

• A) whether debt interest payments are tax deductible and how increased debt might affect the likelihood of the firm going bankrupt
• B) whether debt interest payments are tax deductible and whether or not the bonds could be sold at a premium
• C) whether the markets are perfectly efficient and whether or not all participants have symmetric information
• D) None of these

---

Definitions:

Psychopathology

The scientific study of mental disorders, including their symptoms, etiology (causes), and treatment.

Chronic Pain

Persistent pain that lasts longer than the usual course of an acute illness or injury or for more than three to six months.

Personality Disorders

Types of mental health disorders characterized by enduring maladaptive patterns of behavior, cognition, and inner experience.

Gate Control Theory

A theory that suggests the spinal cord contains a neurological "gate" that controls the transmission of pain signals to the brain.