The Cost of Internal Equity Is Cheaper Than the Cost

question 53

Multiple Choice

The cost of internal equity is cheaper than the cost of external equity.Which of the following statements is/are correct?

• A)Only statement I is correct
• B)Only statement II is correct
• C)Both statements I and II are correct
• D)Neither statement I nor II is correct

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Definitions:

Balance Sheet

A report detailing a business's assets, liabilities, and equity held by shareholders at a certain moment.

Revenue

The total amount of money received by a company from its business activities, such as sales of goods or services, before any expenses are subtracted.

Expense Accounts

Accounts used to record transactions relating to expenses incurred by a business, such as costs for materials, utilities, and salaries.

Common Stock

Equity securities representing ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.