The Disadvantages of Selling Stock to Obtain Long-Term Financing Include

question 345

Multiple Choice

The disadvantages of selling stock to obtain long-term financing include:

• A) the legal obligation to pay dividends if the company is profitable.
• B) the funds contributed by stockholders must be repaid from after-tax profits.
• C) a reduction in the market value of the firm's products.
• D) a possible change in management and policies in the company.

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Definitions:

Encoded Message

A message that has been converted into a code or different format to secure its content during transmission.

Communication Channel

The medium through which information is transmitted from a sender to a receiver.

Field of Experience

The background, knowledge, perceptions, and attitudes that individuals or groups bring to a communication situation, affecting how messages are interpreted.

Field of Experience

The background, knowledge, perceptions, and understanding that individuals or groups bring to a communication situation, influencing their interpretation of messages.