Which of the Following Is the Most Important Factor in the Deutsche

question 29

Multiple Choice

Which of the following is the most important factor in the Deutsche Bank survey?

• A) Inclusion of bond covenants in the bond contract is a factor in borrowing debt
• B) Credit rating
• C) Agency costs
• D) Higher bankruptcy costs

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Definitions:

Taxes Paid

The total amount of taxes remitted to the government by an individual or organization, including income, sales, and property taxes.

Cash Flow to Stockholders

The amount of cash a company pays out to its shareholders, including dividends and net share buybacks.

Dividends Per Share

The amount of dividends paid out to shareholders per share of the company’s stock.

Financial Leverage

The use of borrowed funds in an attempt to increase the return on equity, involving higher risk but potentially higher returns as well.