Which of the Following Statements Describes an Advantage Inherent in Equity

question 78

Multiple Choice

Which of the following statements describes an advantage inherent in equity financing?

• A) The company is not required to repay equity.
• B) Interest is tax-deductible.
• C) A company has an obligation to pay dividends.
• D) Equity has a maturity date.

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Definitions:

Standard Costs

Predetermined costs for materials, labor, and overhead used in budgeting and assessing performance.

Labor Efficiency Variance

A measure of the difference between the actual hours worked by employees and the standard hours expected to complete a task, used to assess labor productivity.

Direct Labor Standards

These standards define the amount of time and the rate of pay anticipated for direct labor required to manufacture a product or provide a service.

Actual Direct Labor Cost

Actual direct labor cost is the total amount of money paid for the wages of laborers directly involved in the production of goods or services.