A Corporation That Uses Both Debt and Equity in Its

question 78

Multiple Choice

A corporation that uses both debt and equity in its capital structure has concluded that the risk premium it must pay on its common stock is too high.To decrease this,the firm can ________.

• A)increase the proportion of long-term debt to decrease the cost of capital
• B)increase the proportion of short-term debt to decrease the cost of capital
• C)decrease the proportion of common stock equity to decrease financial risk
• D)increase the proportion of common stock equity to decrease financial risk

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Definitions:

Controversial

Referring to something that is likely to give rise to public disagreement or debate.

Find Purpose

The process of discovering a meaningful direction in personal or organizational activities that contributes to broader societal or communal goals.

Global Communications

Strategic communications and actions carried out by private, government, or nonprofit organizations to build and maintain relationships in social and political environments outside their home location.

Two-Way Symmetrical Model

A concept in public relations that emphasizes mutual understanding and dialogue between an organization and its publics rather than one-way persuasion or transmission of messages.