Debt Financing Is Made Up of Explicit and Implicit Costs

question 76

Multiple Choice

Debt financing is made up of explicit and implicit costs that refer to:

• A) a higher required ROE and the interest rate bondholders demand, respectively.
• B) the interest rate bondholders demand and a higher required ROE, respectively.
• C) the costs of equity and debt, respectively.
• D) the costs of issuing bonds and the interest rate bondholders demand, respectively.

---

Definitions:

Tracheostomy

A surgical procedure to create an opening through the neck into the trachea to provide an airway.

Impaired Gas Exchange

A condition where there is a problem with the transfer of oxygen and carbon dioxide through the respiratory membrane.

Airway Clearance

Techniques and therapies designed to remove mucus and secretions from the airways to improve breathing function.

Infection

The invasion and multiplication of microorganisms such as bacteria, viruses, and fungi that are not normally present within the body, leading to illness or disease.