If Company Earnings Reflect a Rate of Return Less Than

question 9

Multiple Choice

If company earnings reflect a rate of return less than the cost of debt,then more debt ________.

• A)will increase the percentage of earnings available for distribution to the equity owners
• B)will lower the percentage of earnings available for distribution to the debt owners
• C)will increase the percentage of dividends available for distribution to the equity owners
• D)will lower the percentage of earnings available for distribution to the equity owners

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Definitions:

Social Problems

Challenges or issues that affect individuals, groups, or societies at large, often requiring collective action to address.

Deter Criminals

Deter criminals involves implementing strategies and laws aimed at discouraging unlawful behavior by increasing the risk of detection, punishment, or both.

Crime Rate

The ratio or percentage of crimes committed in a specified area or population over a given period.

Prison

An institution designed to confine and rehabilitate individuals convicted of crimes.