In the Context of the Capital Structure of a Firm

question 50

Multiple Choice

In the context of the capital structure of a firm, which of the following statements is true of equity financing?

• A) It is less flexible than debt financing.
• B) It is less risky than debt financing.
• C) It requires firms to agree to burdensome covenants.
• D) It yields the same tax benefits as debt financing.

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Definitions:

Age Discrimination

Unfair treatment of individuals based on their age, prohibited in employment and other areas under laws like the Age Discrimination in Employment Act.

Civil Penalties

Financial charges, fines, or penalties imposed by governmental agencies as punishment for violating certain laws or regulations, not constituting criminal punishment.

Unauthorized Worker

An individual who is employed without the legal right to work in the jurisdiction or under conditions that violate employment laws.

Hiring of Foreign Workers

The process of employing individuals from countries other than the one where the business operates, often involving specific legal and regulatory considerations.