The Key Differences Between Debt and Equity Capital Include All

question 12

Multiple Choice

The key differences between debt and equity capital include all of the following EXCEPT

• A) maturity.
• B) a voice in management.
• C) tax treatment.
• D) effect on operating leverage.

---

Definitions:

Gross Profit

The financial metric that indicates the difference between revenue and the cost of goods sold (COGS), revealing how much a company earns from its core business activities.

Selling Expenses

Costs incurred directly in the selling of goods and services, such as salaries of sales staff, advertising, and store display.

Cost of Merchandise Sold

The total expense incurred to purchase or produce the goods that have been sold during a particular period.

Credit Terms

The conditions under which credit is extended by a seller to a buyer, including repayment schedule, interest rates, and due dates.