Which of the Following Is a Reason Why Equity Capital

question 172

Multiple Choice

Which of the following is a reason why equity capital is considered riskier than debt capital?

• A) Equity capital has a higher priority claim against assets and earnings.
• B) Equity capital requires regular periodic payments in the form of dividends.
• C) Equity capital expects dividend payments which are not tax-deductible.
• D) Equity capital remains invested in a firm indefinitely.

Recognize the importance of basic bank services in controlling and safeguarding cash.

Understand the shift in reliance from manual to technological controls in advanced accounting systems.

Understand the concept of separation of duties and its importance in reducing errors and fraud.

Acquire knowledge about the components, purposes, and limitations of an internal control system.

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Definitions:

Parasympathetic Nervous System

A division of the autonomic nervous system responsible for conserving energy and lowering the heart rate, among other actions, to maintain homeostasis.

Autonomic Nervous System

The part of the nervous system responsible for control of the bodily functions not consciously directed, such as breathing, the heartbeat, and digestive processes.

Self Report

A method in research where participants provide information about themselves, typically through questionnaires or interviews.

Autonomic Nervous System

The part of the nervous system that controls involuntary bodily functions, such as heart rate and digestion.