Which of the Following Is a Reasonable Conclusion from the Trade-Off

question 61

Multiple Choice

Which of the following is a reasonable conclusion from the trade-off theory of capital structure?

• A)A high debt ratio will result in a maximum price of a firm's ordinary shares.
• B)A firm's ordinary share price will not be affected by the amount of debt a firm uses.
• C)A low debt ratio will result in a maximum price for a firm's ordinary shares.
• D)Modest levels of debt have a more favorable impact on a firm's average cost of capital and share price than no debt.

---

Definitions:

Oral Griseofulvin

A medication taken by mouth used to treat fungal infections of the skin, hair, and nails by inhibiting fungal cell growth.

Therapeutic Management

The systematic and strategic approach to treating a medical condition or disease to improve patient outcomes.

Impetigo Contagiosa

A highly contagious skin infection caused by bacteria, leading to red sores that can rupture and crust over.

Topical Corticosteroids

Anti-inflammatory medications applied to the skin to treat a variety of conditions, including eczema and psoriasis.