As a Firm's Debt-Equity Ratio Approaches Zero,the Firm's Expected Return

question 80

Multiple Choice

As a firm's debt-equity ratio approaches zero,the firm's expected return on equity approaches:

• A) the expected return on debt.
• B) the expected return on assets.
• C) its maximum.
• D) zero.

---

Definitions:

Implementing Punishment

The process of applying penalties or consequences for undesirable behaviors, with the intention of reducing or eliminating those behaviors.

Schools

Institutions dedicated to the education and development of students through structured courses, curricula, and social interaction.

Principles

Fundamental truths or propositions that serve as the foundation for a system of belief, behavior, or reasoning.

Limitations

Constraints or restrictions that limit the scope, effectiveness, or applicability of something.