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Irrelevant Information Is Useless and May Actually Hurt the Performance

question 83

True/False

Irrelevant information is useless and may actually hurt the performance of a busy manager who has to spend valuable time determining whether information is relevant.


Definitions:

Annual Coupon

The fixed interest payment a bondholder receives from the bond's issuer each year.

Perpetual Debt

Debt instruments with no maturity date, allowing issuers to pay interest indefinitely without repaying the principal.

Coupon Rate

The yearly interest rate paid on a bond, shown as a percentage of its nominal value.

Interest Tax Shield

The reduction in income taxes that results from taking allowable deductions for interest expense.

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