The Hierarchy of Funding Sources as Applied to Capital Structure

question 44

Multiple Choice

The hierarchy of funding sources as applied to capital structure is derived from

• A)financial distress costs.
• B)the Modigliani-Miller theory.
• C)preferential tax treatment of debt.
• D)agency costs.

Evaluate the effects of price elasticity on total expenditures and demand.

Understand the concept of quasilinear and homothetic preferences and their implications.

Understand the core principles and purposes of case management.

Identify and describe key strategies and techniques in solution-focused therapy and task-centered models.

---

Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.

Repairs and Maintenance

The expenses a company incurs to keep its assets in working condition, not extending the life of the asset but rather restoring it or maintaining current condition.

Capital Expenditure

Long-term investments or expenditures made by a company to acquire or upgrade physical assets such as equipment, property, or industrial buildings.

Net Income

The amount of profit left over after all expenses and taxes have been subtracted from total revenue.