Which of the Statements Below Is TRUE

question 54

Multiple Choice

Which of the statements below is TRUE?

• A)The frequency of bankruptcy for a high-tech up-start firm is lower than for a blue-chip firm,so we see higher borrowing rates for start-ups than for mature firms.
• B)The frequency of bankruptcy for a high-tech up-start firm is higher than for a blue-chip firm,so we see lower borrowing rates for start-ups than for mature firms.
• C)The frequency of bankruptcy for a high-tech up-start firm is lower than for a blue-chip firm,so we see lower borrowing rates for start-ups than for mature firms.
• D)The frequency of bankruptcy for a high-tech up-start firm is higher than for a blue-chip firm,so we see higher borrowing rates for start-ups than for mature firms.

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Definitions:

Sales

The revenue generated from the sale of goods or services by a company during a specific period.

Stock Warrants

Stock Warrants are derivatives that grant the holder the right to buy a company's stock at a specific price before the expiration date.

Consolidated Earnings

The aggregate amount of net income earned by a parent company and its subsidiaries, reported as a single figure in the parent's financial statements.

Diluted Earnings

Net income available to common shareholders, adjusted for the potential impact of convertible securities, options, and warrants, showing earnings per share if all convertibles were exercised.