In Considering Equity and Debt Financing, Which of the Following

question 29

Multiple Choice

In considering equity and debt financing, which of the following statements is generally true?

• A)The lower the measure of the long-term debt-to-equity ratio, the greater the likelihood the company will have difficulty in meeting its obligation in some future period.
• B)Interest and dividend payments are required to be made by the issuing company.
• C)The higher the measure of the debt-to-equity ratio, the greater the likelihood the company will have difficulty in meeting its obligation in some future period.
• D)Most companies prefer to have no debt and rely exclusively on equity financing.

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Definitions:

Counterarguments

Arguments presented in opposition to another argument, typically used to challenge or debate a point of view.

Economists

Experts or scholars who study the production, distribution, and consumption of goods and services, focusing on economic theories and policies.

Export Coffee

The act of sending domestically produced coffee to another country for sale or trade.

Import Coffee

The act of bringing coffee into a country from abroad for sale, typically influenced by factors like global production, trade policies, and consumption patterns.