If Ayanda Finances Her Business with Equity Rather Than Debt

question 6

Multiple Choice

If Ayanda finances her business with equity rather than debt, her net income could potentially be greater because:

• A)equity financing almost always leads to better business performance than debt financing.
• B)the terms of equity financing are more stable than the terms of debt financing.
• C)equity financing has a positive impact on asset selection.
• D)there is no interest expense.

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Definitions:

Ossicles

The three small bones in the middle ear that transmit sound vibrations from the eardrum to the inner ear.

Timbre

The quality of a sound that distinguishes it from other sounds of the same pitch and volume.

Amplitude

The height or magnitude of a wave signal, illustrating the intensity or level of fluctuation.

Pitch

The perception of how high or low a sound is, fundamentally related to the frequency of the sound wave.