Changing the Capital Structure by Adding Debt Will Not

question 33

Multiple Choice

Changing the capital structure by adding debt will not:

• A) increase the return that shareholders require.
• B) increase default risk.
• C) decrease debtholder risk.
• D)increase the cost of debt.

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Definitions:

Overcurrent

A condition where the current exceeds the rated current of equipment or the capacity of conductors, potentially causing damage or hazard.

Low Intensity

Describes a relatively weak level of power, brightness, or energy output, often used in the context of lights or signals.

Fault Current

The excessive electrical current that flows through a circuit during a fault condition.

Short-Circuits

Electrical connections that unintentionally direct current along an unintended path, often resulting in excessive current flow.