Which of the Following Is True

question 62

Multiple Choice

Which of the following is true?

• A)A firm with low anticipated profit will likely take on a high level of debt.
• B)A successful firm will probably take on zero debt.
• C)Rational firms raise debt levels when profits are expected to decline.
• D)Rational investors are likely to infer a higher firm value from a zero debt level.
• E)Investors will generally view an increase in debt as a positive sign for the firm's value.

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Definitions:

Program Manager

A professional responsible for overseeing the successful planning, execution, and closure of a program, which consists of multiple, related projects.

Organisational Design

The process of structuring an organization in order to effectively manage resources, operations, and achieve goals.

Lateral Communication

The exchange of information, ideas, or requests between individuals at the same level within an organizational hierarchy.

Mechanistic and Organic Designs

Two contrasting organizational structures where mechanistic designs are rigid and hierarchical, suited for stable environments, whilst organic designs are more flexible and adaptive, ideal for dynamic environments.