From the Company's Point of View, Which of the Following

question 29

Multiple Choice

From the company's point of view, which of the following is an advantage of financing with equity as opposed to debt?

• A)Dividends are not an expense.
• B)Equity does not have committed payments.
• C)Shareholders have the right to vote.
• D)The cost of equity is not tax deductible.

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Definitions:

Personal Income

The total amount of income earned by individuals and households in an economy before taxes and other deductions.

Liability

A financial obligation or debt that an individual or company owes to another entity, which must be settled over time.

Long-term Debt

Borrowings or financial obligations that are due to be repaid over a period longer than one year.

Pro Forma Financial Statements

Financial statements based on hypothetical scenarios or assumptions about the future of a business.