Borrowing Cannot Increase the Value of Equity Because It Always

question 84

True/False

Borrowing cannot increase the value of equity because it always adds risk and stockholders are risk averse.

---

Definitions:

Genetically Predisposed Traits

Characteristics or conditions that individuals are more likely to develop due to their genetic makeup.

DNA Called Genes

Segments of DNA that carry the genetic information necessary for the coding of proteins and are inherited from one generation to another.

Chromosomes

Filamentous entities situated in the nucleus of both animal and plant cells, composed of protein and a solitary DNA molecule, responsible for transmitting genetic data.

Segments

Divisions or parts of a whole, often used in reference to parts of organizations, markets, or society.