Why Might a Firm Opt for Long-Term Debt Instead of Equity

question 13

Multiple Choice

Why might a firm opt for long-term debt instead of equity?

• A)the impact of U.S. tax laws
• B)debt is always cheaper
• C)equity is always cheaper
• D)Both a and b are correct.

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Definitions:

Night's Sleep

The period of rest, typically at night, during which an individual refrains from wakefulness and engages in a natural state of unconsciousness.

REM Sleep

A phase of sleep characterized by rapid eye movements, low muscle tone, and vivid dreams, playing a critical role in learning and memory.

Dreaming

Thoughts, visuals, and emotional sensations that occur in one's mind during the state of sleep.

Stage 1 Sleep

The initial phase of the sleep cycle, characterized by light sleep, where one can be easily awakened and may experience sudden muscle contractions.