Using the Telephone to Interact with and Sell Directly to Consumers

question 97

Multiple Choice

Using the telephone to interact with and sell directly to consumers is referred to as

• A) digital marketing.
• B) telemarketing.
• C) solicitation marketing.
• D) telecommerce.
• E) direct selling.

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Definitions:

Financial Leverage

The use of borrowed money (debt) to amplify the potential returns from an investment, increasing risk and potentially reward.

Financial Distress

A condition in which a company cannot generate the revenues or income necessary to meet its financial obligations, which may lead to bankruptcy.

MM Propositions

The Modigliani-Miller propositions, which are foundational theorems in corporate finance, asserting that under certain conditions, the value of a firm is unaffected by its capital structure.

Optimal Capital Structure

The best mix of debt and equity financing that maximizes a company’s market value while minimizing its cost of capital.