The Disadvantages of Issuing Common Stock Versus Long-Term Debt Include

question 21

Multiple Choice

The disadvantages of issuing common stock versus long-term debt include all of the following EXCEPT

• A) the potential dilution of earnings.
• B) high cost.
• C) no maturity date on which the par value of the issue must be repaid.
• D) the market perception that management thinks the firm is over-valued, causing a decline in stock price.

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Definitions:

Graduate Assistantships

Financial aid options for graduate students involving part-time work in teaching or research in exchange for tuition waivers and a stipend.

Sample Points

Individual units or entities selected from a population for the purpose of statistical analysis or study.

Mutually Exclusive

Two events that cannot occur at the same time within a given experiment or scenario.

Independent Events

Two or more events in probability where the occurrence of one event does not affect the probability of occurrence of the other event(s).