Which of the Following Is Most Likely to Cause a Firm

question 2

Multiple Choice

Which of the following is most likely to cause a firm to use more financial leverage?

• A)the current owners concern for maintaining control of a healthy firm
• B)concern for the firm's Moodys and S & P bond ratings
• C)concern for maintaining excess borrowing capacity
• D)management's concern for their own risk

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Definitions:

Null Hypothesis

A hypothesis that states there is no statistical significance between the two specified populations, and any observed difference is due to sampling or experimental error.

Multinomial Population

A population in statistics that can fall into more than two categories.

Z Test

A statistical test used to determine if there is a significant difference between the mean of a sample and the mean of a population.

Proportions

The fraction of a whole expressed as a percentage, ratio, or fraction, representing parts of a larger quantity or population.