The Expected Return on Equities Is Greater Than the Expected

question 64

Multiple Choice

The expected return on equities is greater than the expected return on debt in part because

• A) debt securities are serviced prior to equity securities.
• B) interest payments to bondholders are generally made only if the firm makes a profit.
• C) only a small portion of return to equity comes from increased capital appreciation.
• D) none of the above.

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Definitions:

Home Based

Pertaining to businesses or activities that are operated out of a person's residence, rather than from an external office or commercial establishment.

Small Business Administration

A U.S. government agency designed to support and assist small businesses through funding, training, and advisory services.

Number of Employees

The number of employees refers to the total count of individuals working for an organization, which can indicate the size and scope of the business.

Small Business Administration (SBA)

A U.S. government agency that provides support to entrepreneurs and small businesses through loans, loan guarantees, counseling, and other assistance programs.