Which of the Following Is the Best Reason for the Issuance

question 82

Multiple Choice

Which of the following is the best reason for the issuance of long-term liabilities?

• A)Debt financing offers an income tax advantage.
• B)Risk to the firm may be increased.
• C)Ownership interest is diluted but may be necessary to do.
• D)Debt financing may cost the entity more but is the only available source of funds.

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Definitions:

Source Traits

Fundamental characteristics that underlie an individual's behavior, forming the foundation of their personality.

16 PF Test

A personality test that measures sixteen personality factors, used for psychological evaluation.

Factor Analysis

A statistical technique that explains the variance among observed, related variables through a smaller number of latent variables, known as factors.

Genetically Based

Characteristics or traits that are influenced by genes inherited from one's parents.