Which Term Refers to the Total of All Rewards Provided

question 8

Multiple Choice

Which term refers to the total of all rewards provided to employees in return for their services?

• A) benefits
• B) commissions
• C) bonuses
• D) compensation

---

Definitions:

Interest Tax Shield

A lowered income tax obligation stemming from approved deductions on interest expenses.

Levered Firm

A company that uses debt (loans or bonds) in addition to equity in its financing structure, often leading to higher risk and potentially higher returns.

M&M Proposition I

A theory in corporate finance suggesting that in a perfect market, the value of a firm is unaffected by how it is financed, regardless of the debt-to-equity ratio.

Unlevered Cost of Capital

The cost of capital for a company that has no debt, reflecting the risk of investing in the company's equity alone.