Which of the Following Factors Favor the Issuance of Debt

question 34

Multiple Choice

Which of the following factors favor the issuance of debt in the financing decision?
I.Market signaling
II.Distress costs
III.Tax benefits
IV.Financial flexibility

• A) I and II only
• B) I and III only
• C) II and IV only
• D) I,II,and III only
• E) I,II,and IV only

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Definitions:

Objectively

In a manner that is not influenced by personal feelings or biases, based on factual and unbiased considerations.

Labor

The human effort, both physical and mental, used in the production of goods and services.

Positive Economics

Positive Economics is the branch of economics that deals with the description and explanation of economic phenomena, focusing on factual and cause-and-effect relationships.

Economic Variables

Quantitative measures that represent aspects of the economy or a company and can change over time, such as GDP, inflation rate, and unemployment rate.