A stock price fall may come from Blank______.Multiple choice question.a decrease in debtan increase in debt
Question
A stock price fall may come from Blank______.Multiple choice question.a decrease in debtan increase in debt
Solution
A stock price fall may come from an increase in debt. When a company increases its debt, it may indicate financial instability, which can lead to a decrease in the company's stock price as investors lose confidence. Therefore, the correct answer is "an increase in debt".
Similar Questions
Firm value initially increases when the proportion of debt in the capital structure increases due to the Blank______.Multiple choice question.lower dividend paymentsdebt tax shieldhigher dividend paymentslower interest expenses
When raising debt to fool the market, the stock price will Blank______ when the market realizes the company tried to fool it.Multiple choice question.fallremain the sameincrease
Multiple Choice QuestionOne type of risk that investors in stock take is a decrease in Blank______.Multiple choice question.valueavailable creditcampaigns by the companyinterest rate
The weighted average cost of capital rises at higher levels of debt owing to Blank______.Multiple choice question.financial distress costshigher dividend costshigher working capitalexcess free cash flow
Whenever the cost of capital for an all-equity firm is greater than the cost of debt, the cost of equity Blank______.Multiple choice question.decreases with leverageincreases with leverageis unaffected by leverage
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.