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On the surface,perhaps,the decade of the 1920s appears to be one of the healthiest periods of economic growth and general prosperity in U.S.history.However,in retrospect,several weaknesses or unhealthy developments were evident.These negative developments contributed to the economic collapse of the 1930s.List and describe them.
Bankruptcy Costs
Expenses associated with the bankruptcy process, including legal fees, court fees, and losses from selling assets at reduced prices, impacting the value recovered by creditors.
Interest Tax Shield
A reduction in taxable income for an individual or corporation achieved by deducting interest paid on their loans.
Debt-Equity Ratio
Debt-Equity Ratio measures a company's financial leverage, calculated by dividing its total liabilities by its stockholders' equity.
Capital Asset Pricing Model
A model that describes the relationship between systematic risk and expected return for assets, particularly stocks, used to assess the risk of adding a new asset to a portfolio.
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