Issuing Bonds Rather Than Stock Will Result in an Increase

question 81

True/False

Issuing bonds rather than stock will result in an increase in the debt-to-equity ratio.

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Definitions:

Economies of Scale

Enterprises gain cost benefits from their scale of operation, which typically results in the cost per unit of output decreasing as the scale increases.

Economic Profit

The total revenue of a business minus its explicit and implicit costs.

Government Regulation

Policies and rules established by government bodies to control and guide the activities of businesses and individuals within the society.

Government Ownership

Refers to assets and enterprises owned by the government or public authorities, intended for public benefit or strategic interests.