A luxury cell phone maker has a high fixed-cost base and a lot of debt. Which stakeholder in the company would you rather be?
A. A bond holder in a booming company
B. A shareholder in a stagnant economy
C. A bond holder in a stagnant economy
D. A shareholder in a booming economy
Answer: Option D is correct
We would rather be a shareholder in a booming economy, (in a booming economy due to better future expectations we can expect an increase in share price)