Equity Financing Is Preferred for Unrelated Diversification While Debt Financing

question 25

True/False

Equity financing is preferred for unrelated diversification while debt financing is preferred for related diversification.

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Definitions:

Transferable

Characteristic of an asset or right that allows it to be passed from one party to another, often through sale or trade.

Purpose

The reason for which something is done or created, or for which something exists; intent or objective.

Instrument

A legal document formalizing an agreement or right, such as contracts, wills, or deeds.

Conditional Order

Refers to an order in a legal or financial context that will only be executed if certain conditions are met.