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.

---

Definitions:

Gross National Product

The total value of all goods and services produced by a country's residents and businesses, regardless of where the production takes place, over a specific time period.

Gross Domestic Product

The total value of all goods and services produced within a country over a specific time period, a primary indicator of economic health.

Colonies of Japan

Territories that were under Japanese imperial control from the late 19th century through the mid-20th century, including Korea, Taiwan, and parts of China.

Transportation Networks

Systems consisting of roads, railways, air routes, and waterways that facilitate the movement of goods and people across various locations.