A Manager May Prefer Less Than the Optimal Level of Debt,because

question 15

Multiple Choice

A manager may prefer less than the optimal level of debt,because:

• A)there will be a decrease in the influence of equity holders in the daily decision making process.
• B)it may decrease the overall return on investment.
• C)additional debt increases the risk of bankruptcy and limits a manager's discretion.
• D)additional debt decreases the tax-benefits though it decreases the cost of borrowing.

Understand how to calculate GDP with given macroeconomic variables.

Grasp the concept of the GDP deflator as a measure of changes in price levels and its calculation.

Understand the effects of purchasing domestic versus foreign goods on GDP.

Recognize the distinction between real GDP as an economic well-being measure versus nominal GDP.

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Definitions:

Celebrity Endorsement

A marketing strategy where famous personalities are used to promote a product, service, or brand, leveraging their fame and influence.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, establishing a market balance.

Equilibrium Quantity

The quantity of goods supplied that is equal to the quantity of goods demanded at the market equilibrium price.

Heterogeneity

The quality or state of being diverse in character or content, lacking uniformity.