The Disadvantages of Debt to the Corporation Include All but Which

question 32

Multiple Choice

The disadvantages of debt to the corporation include all but which of the following?

• A) Debt may have to be paid back with "cheaper" dollars.
• B) Interest and principal payments must be met.
• C) Indenture agreements may place burdensome restrictions on the firm.
• D) Too much debt may depress the firm's stock price.

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Definitions:

Power Distance

A cultural dimension that reflects the degree to which individuals in a society accept and expect power to be distributed unequally.

Seniority

The concept of preferring individuals for certain privileges, positions, or responsibilities based on their length of service or experience in a particular organization or profession.

Collectivism

A cultural or social perspective that emphasizes the priority of group needs over individual desires.

Individualism

A social theory favoring freedom of action for individuals over collective or state control.