Which of the Following Is an Advantage of a Company

question 114

Multiple Choice

Which of the following is an advantage of a company using equity rather than debt to finance a project?

• A)Dividends do not need to be paid.
• B)Interest is tax deductible, whereas dividends paid are not.
• C)Dividends require less cash than does paying interest on debt.
• D)No taxation occurs, similar to bonds.

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Definitions:

Labor Employment

The engagement of workers in the workforce to perform tasks in exchange for wages or salaries.

Marginal Product

The additional output produced as a result of utilizing one more unit of a particular input.

Marginal Revenue

The additional income received from selling one more unit of a good or service.

Optimal Employment

The level of employment where the economy is at its most efficient, producing the maximum output without causing inflationary pressures.