As Whole Foods Considers Equity Financing, It Thinks About the Influence

question 15

Multiple Choice

As Whole Foods considers equity financing, it thinks about the influence that it may have on company operations. Which of the following is an advantage of equity financing in relation to this key consideration?

• A) higher interest rates increase the cost of financing
• B) it can be either short or long term
• C) it does not need to be repaid, which provides financial flexibility for the company
• D) interest expenses can be deducted from company profits, lowering the company's tax liabilities

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Definitions:

Agents

Individuals or entities authorized to act on behalf of others, making decisions or executing transactions in various contexts such as real estate, law, or finance.

Operating Agreement

A document that outlines the governance and operational guidelines of a limited liability company (LLC).

Voting Rights

The entitlement of individuals to participate in the election of government officials and in the process of decision-making.

Member-Managers

Individuals in a limited liability company (LLC) who are both owners (members) and actively involved in managing the day-to-day operations.