A Disadvantage of Issuing Stock Instead of Debt Is That

question 100

Multiple Choice

A disadvantage of issuing stock instead of debt is that stock:

• A)creates no interest expense which must be paid.
• B)is less risky to the issuing corporation.
• C)creates no liabilities for the corporation.
• D)generally results in lower earnings per share.

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Definitions:

Sodium Ions

Positively charged particles derived from the element sodium, essential in various physiological processes including nerve signal transmission and muscle contraction.

Neuron

A specialized cell transmitting nerve impulses; a fundamental unit of the brain and nervous system, responsible for receiving, processing, and transmitting information.

Motor Neuron

A type of neuron that sends impulses from the central nervous system to a muscle or gland, prompting action.

Dendrite

The branched projections of a neuron that receive electrochemical stimulation from other neural cells.