Relying Primarily on Debt Financing Is Very Dangerous for a Company

question 21

Multiple Choice

Relying primarily on debt financing is very dangerous for a company because ________.

• A) Creditors can force a company into bankruptcy or take over company property
• B) Creditors can sabotage the business by refusing to lend it money
• C) Creditors can gain a majority share of the company and take it over
• D) All of the above
• E) None of the above

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Definitions:

Factor Analysis

A statistical method used to identify underlying variables, or factors, that explain the pattern of correlations among observed variables.

Personality Trait

Relatively stable and enduring patterns of thought, feeling, and behavior that characterize an individual's responses across a variety of situations.

Growth-Promoting Climate

An environment characterized by support, understanding, and encouragement, fostering personal development and growth.

Rogers

Refers to Carl Rogers, an influential psychologist known for developing the person-centered approach to therapy and the concept of unconditional positive regard.