An analyst is comparing two companies from the same industry
that are based in different countries. Company A's home country has
a strong legal system, while company B's home country has a weak
legal system. Based only on this information and all else being
equal, the analyst will most likely expect to
find that company A has a:
Group of answer choices
lower debt‐to‐equity ratio and longer maturity debt.
higher debt‐to‐equity ratio and shorter maturity debt.
higher debt‐to‐equity ratio and longer maturity debt.
Agency costs of equity are most likely to be
higher for a company relative to its peers if it has:
Group of answer choices
a lower debt‐to‐equity ratio.
higher accounting transparency.
better corporate governance.
A company has set a goal of maintaining its current credit
rating on its debt of A. This is most
likely being done to:
Group of answer choices
ensure that there is no risk of default on its debt.
achieve the lowest debt cost possible.
avoid having to incur higher debt costs if the company's credit
rating falls.
An analyst is comparing two companies from the same industry that are based in different countries. Company A's home cou
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