Which of the Following Statements Regarding Debt and Equity Financing

question 7

Multiple Choice

Which of the following statements regarding debt and equity financing is FALSE?

• A) Interest payments on debt financing are deductible by the corporation for tax purposes.
• B) Interest income from debt financing is taxable in the hands of the investor.
• C)Dividend payments on equity financing are deductible by the corporation for tax purposes.
• D) Dividends are paid from after-tax corporate income.

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Definitions:

Surfactant

A substance that reduces surface tension between two liquids, or between a liquid and a gas, used extensively in medical treatment, especially in neonatal care to aid in breathing.

Alveoli

Tiny air sacs in the lungs where the exchange of oxygen and carbon dioxide occurs.

Sinoatrial Node

A group of cells located in the right atrium of the heart that spontaneously generates electrical impulses, acting as the heart's natural pacemaker.

Heart Rate

The number of heartbeats per minute, a vital sign indicating the heart's activity.