When Firm Borrows at the ________ Cost of Capital for Debt,its

question 61

Multiple Choice

When firm borrows at the ________ cost of capital for debt,its equity cost of capital ________.

• A) low; rises
• B) high; rises
• C) low; decreases
• D) high; decreases

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Definitions:

Cultural Truisms

Widely held beliefs or norms within a culture that are rarely questioned.

Folk Wisdoms

Traditional beliefs, proverbs, and sayings that are thought to encapsulate the practical knowledge of culture or society.

Operational Definitions

Specific descriptions of concepts and variables in terms of the methods used to measure or manipulate them in research.

A Priori Causal Theories

Theoretical assumptions made ahead of empirical research, based on logical deduction rather than observation or experience.