What Control Implications Do a Firm's Capital Structure Decisions Have

question 77

Multiple Choice

What control implications do a firm's capital structure decisions have?

• A) Issuing too much debt as to cause financial distress
• B) Dilution issues
• C) Choice between debt and equity financing
• D) All of the above

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Definitions:

Fiscal Stress

A situation in which a government struggles to meet its financial commitments or to balance its budget.

Credit Worthiness

An assessment of a borrower's ability to repay debts based on their financial history, credit score, and other factors.

Abnormal Earnings

Profits exceeding or falling short of the normal expected earnings due to unusual or non-recurring items, not indicative of a company's ongoing operational performance.

Actual Earnings

Actual earnings are the real profits that a company generates during a specific period, as reported in its financial statements.