Which of the Following Would Be a Good Reason to Choose

question 35

Multiple Choice

Which of the following would be a good reason to choose to make an equity investment in a corporation rather than lending money to a corporation?

• A) The return on equity is riskier than debt but is not fixed and may be higher.
• B) The holder of an equity investment always receives a higher return than a debt holder.
• C) The holder of equity has the same legal entitlement to receive dividends as a debt holder has to receive interest.
• D) The return paid on an equity investment is more secure than the return on debt.
• E) It is easier to assess the price of an equity investment.

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Definitions:

Environmental Factors

External influences from the surrounding environment that can affect the growth, development, and survival of organisms.

Parental Stock

The breeding animals or plants used in agriculture or aquaculture, from which offspring are produced for specific qualities or production purposes.

Sympatric Speciation

The process where new species evolve from a single ancestral species while inhabiting the same geographic region.

Separate Identities

The concept of distinguishing or individualizing characteristics that make a person, group, or entity distinct from others.