Which of the Following Firms Is Likely to Maintain Low

question 53

Multiple Choice

Which of the following firms is likely to maintain low levels of debt?

• A)An electric utility
• B)A tobacco company
• C)An Internet firm
• D)A mature restaurant chain

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Definitions:

Preferential Voting Rights

Rights allowing certain shareholders to have more power or influence in corporate decisions compared to ordinary shareholders.

Coupon Rate

The coupon rate is the interest rate that the issuer of a bond agrees to pay annually or semi-annually to the bondholder.

Market Rate

The prevailing interest rate available in the general market.

Maturity Value

The amount that will be paid to the holder of a financial instrument at its maturity date, including principal and any remaining interest.