The Benefits of Debt to the Corporation Include All of the Following

question 109

Multiple Choice

The benefits of debt to the corporation include all of the following except for which one?

• A)Tax-deductible interest payments
• B)Increases the stock value when used heavily
• C)Fixed obligation
• D)Generally a lower overall cost than equity

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Definitions:

Cash Fund

A reserve of cash set aside for specific needs or emergencies, ensuring liquidity for unexpected expenses.

Gain on Disposal

The profit realized from the sale of an asset for more than its book value.

Cost of Goods Sold

The total cost associated with making or acquiring any goods sold during a reporting period.

Natural Resources

Assets that consist of standing timber and underground deposits of oil, gas, and minerals.