What Can Firms Do to Avoid or Withstand a Technological

question 108

Short Answer

What can firms do to avoid or withstand a technological discontinuity?

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Definitions:

Financial Leverage

The use of borrowed funds to increase the potential return of an investment, amplifying both the potential gains and losses.

Unlevered Cost

The cost of investment or project financing without taking into account the impact of leveraging or borrowing.

Capital Structure

The mix of debt and equity financing used by a company to fund its operations and growth.

Interest Tax Shield

Deducting interest expenses on debt from taxable income leads to a reduction in income tax liability.