When the Firm Keeps Its Interest Payments to a Target

question 90

Multiple Choice

When the firm keeps its interest payments to a target fraction of its FCF,we say it has a(n) ________ interest coverage ratio.

• A) constant
• B) average
• C) variable
• D) zero

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Definitions:

Negative Reinforcement

A process in behavior modification where the removal of an unfavorable outcome or stimulus strengthens a certain behavior.

Punishment

A consequence that reduces the likelihood of the behavior it follows.

Variable-ratio Schedule

A reinforcement strategy in which a response is rewarded after an unpredictable number of responses, often used in gambling.

Response Rate

The proportion of people who respond to a specific call-to-action, questionnaire, or experiment out of the total number solicited.