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

question 7

Multiple Choice

The disadvantages of issuing 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.

---

Definitions:

Sensory Adaptation

The process by which sensory receptors become less sensitive to constant stimuli over time, allowing organisms to focus on changes in their environment.

Subliminal Stimulation

A sensory or psychological input that is below an individual's threshold for conscious perception, yet can influence thoughts or actions.

Sensory Receptors

Sensory receptors are specialized cells or nerve endings that respond to changes in the environment by sending signals to the central nervous system, enabling perception.

Bottom-up Processing

An approach to information processing that starts with the sensory input and builds up to the final representation in the brain.