Generating Capital by Means of Debt Financing

question 170

Multiple Choice

Generating capital by means of debt financing:

• A) Involves borrowing money, either from a bank loan or from the use of corporate bonds.
• B) Means that the firm borrowing the money will have to pay interest charges.
• C) May be worth it if the borrowed money is used to implement a marketing plan that earns a return greater than the cost of borrowing the money.
• D) Means that the firm will have to put up some of its assets as a loan guarantee.
• E) All of these.

---

Definitions:

Premodern

Referring to the period or aspects of society before the modern era, characterized by traditional, often agrarian societies.

Subculture

A cultural group within a larger culture, often with beliefs or interests at variance with those of the larger culture.

Dominant Culture

The set of cultural practices, beliefs, and values that are predominately observed, valued, and practiced within a society.

Distinctive Values

Unique or characteristic beliefs and principles that guide behavior and decision-making within a culture, community, or individual.