Chapter 5 in class activity

One problem that is related with debt financing is (a)   cost

As the debt-to-equity ratio (a)   , the probability of default for the firm will increases.

In the event of bankruptcy, the ownership of the firm's asset will be transferred from __________ to ____________

(a)  

Two types of bankruptcy costs are ________ cost and ________ cost

(a)  

(a)   cost is the costs of avoiding bankruptcy filing (such as loss of customers and losing talented employees who are leaving the company)

(a)   capital structure is the capital structure that cause the benefit of financial leverage equal to the cost of financial leverage.

(a)   theory says that firms borrow up to the point where tax benefit from additional debt is equal to the cost of financial distress.

The implementation of debt covenants by creditors for fear of agency cost problem is called the agency cost of (a)  

The Pecking Order Theory stated that firm prefer to use (a)   financing whenever possible

According to Signaling effect of equity, firms will issue additional equity to raise capital when the stock is (a)