Which of the Following Is an Advantage for a Firm

question 110

Multiple Choice

Which of the following is an advantage for a firm to issue common stock over long-term debt?

• A) the cost of equity financing is less than the cost of debt financing
• B) the primary claim of equityholders on income and assets in the event of liquidation
• C) no maturity date on which the par value of the issue must be repaid
• D) the tax deductibility of dividends which lowers the cost of equity financing

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