There Are Two Costs of Debt Finance

question 63

True/False

There are two costs of debt finance.The explicit cost of debt is the rate of interest that bondholders demand.But there is also an implicit cost,because higher levels of debt increase the required rate of return to equity.

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Definitions:

Contaminated Rail

This refers to railway tracks that have been exposed to pollutants or hazardous substances, potentially posing risks to the environment and health.

Urban Residents

Individuals who live within the confines of a city or densely populated area.

Urban Areas

Areas known for their significant concentration of people and extensive anthropogenic characteristics relative to nearby regions.

Urban Sprawl

The unchecked spread of city regions into adjacent rural lands, frequently identified by sparse residential growth.