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.

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Definitions:

Codominance

A genetic scenario where two different alleles of a gene are expressed equally in the phenotype of a heterozygous individual.

Incomplete Dominance

A genetic phenomenon in which heterozygous alleles result in a phenotype that is a blend of the two parental traits.

Familial Hypercholesterolemia

A genetic disorder characterized by high cholesterol levels, leading to an increased risk of heart disease.

Homozygous

Having two identical alleles for a particular gene, which can result in the gene being expressed in a more uniform manner.