One Advantage of Debt Financing Over Equity Financing Is

question 133

Multiple Choice

One advantage of debt financing over equity financing is:

• A) tax-deductible dividends.
• B) tax-deductible interest.
• C) tax-deductible principal repayment.
• D) tax-free interest income.

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Definitions:

Financial Position

A company's monetary resources and obligations at a given point in time, reflected in its balance sheet.

Net Working Capital

The gap between a firm's existing assets and its immediate liabilities, showing the company's short-term financial stability.

Accounts Receivable

Financial dues customers hold with a company for the provision of goods or services, awaiting recompense.

Accounts Payable

Money owed by a company to its suppliers or creditors for goods and services received but not yet paid for.