Which One of These Statements Is Correct

question 75

Multiple Choice

Which one of these statements is correct?

• A)There is no condition known to date whereby a corporation can increase firm value through the use of leverage.
• B)Corporations generally pay a lower cost on debt than do individuals due to their vast pool of liquid assets.
• C)If individuals pay a higher cost to borrow than corporations do,then corporations can increase firm value by borrowing.
• D)Margin accounts tend to be high interest rate sources of funds for individuals.
• E)Corporations can increase firm value by borrowing provided their interest rate on debt exceeds that paid by individuals.

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Definitions:

Service Gap

Results when a service fails to meet the expectations that customers have about how it should be delivered.

Knowledge Gap

The difference in understanding or information between individuals or groups, especially in relation to access or comprehension of specific subject matter.

Tangibles

Physical items or goods that can be seen, touched, and measured, as opposed to services or digital products.

Responsiveness

The ability of a company, service, or product to react quickly and positively to customer needs or changes in the market.