The Disadvantages of Selling Stock to Obtain Long-Term Financing Include

question 345

Multiple Choice

The disadvantages of selling stock to obtain long-term financing include:

• A) the legal obligation to pay dividends if the company is profitable.
• B) the funds contributed by stockholders must be repaid from after-tax profits.
• C) a reduction in the market value of the firm's products.
• D) a possible change in management and policies in the company.

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Definitions:

Responsible Investment

An approach to investing that seeks to incorporate environmental, social, and governance (ESG) factors into investment decisions, aiming to generate sustainable, long-term returns.

Principles

Fundamental truths or propositions that serve as the foundation for a system of belief, behavior, or reasoning.

GRI Framework

A set of standardized guidelines assisting companies in preparing and disclosing their economic, environmental, and social performance.