Use the Following Information to Answer the Question(s)below

question 49

Multiple Choice

Use the following information to answer the question(s) below.
Consider the following information regarding corporate bonds:
-If a firm's excess cash holdings are greater than its debt,using net debt as the measure of leverage will result in:

• A)its unlevered beta and cost of capital equalling zero.
• B)its unlevered beta and cost of capital being greater than its equity beta and cost of capital.
• C)the risk of the firm's equity being increased by its cash holdings in excess of its operating needs.
• D)the risk of the firm's debt being increased by its cash holdings in excess of its operating needs.

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Definitions:

Depression

A common and serious mood disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.

Therapeutic Alliance

The collaborative and trusting relationship between a therapist and client, which is crucial for effective therapy.

Unconditional Positive Regard

Accepting and respecting others as they are without judgment or evaluation.

Mutual Understanding

A shared agreement or knowledge between individuals or groups, often leading to effective communication or cooperation.