If Default Costs Are Significant

question 92

Multiple Choice

If default costs are significant,

• A)corporate hedging would be justifiable because it will reduce the probability of default.
• B)corporate hedging would be unjustifiable because it will increase the probability of default.
• C)corporate hedging would be unjustifiable because it will increase the probability of default,resulting in a decreased credit rating and higher financing costs.
• D)none of the options

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Definitions:

Fishery Identification

The process of classifying and recognizing different fish species, important for managing and conserving fish populations.

Location

The specific place or position where something exists or is situated, often specified in terms of geographical coordinates.

Explicit Property Right

A clear and legally enforceable claim or entitlement to own, use, and dispose of an asset or property.

Production Costs

The expenses incurred in the manufacture of a product, including labor, materials, and overhead.