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:

Epinephrine

A hormone and neurotransmitter also known as adrenaline, involved in regulating visceral functions (e.g., heart rate) and the 'fight or flight' response.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting mood and arousal.

Computer Voice Stress Analyzer

A device or software used to evaluate stress levels in a person's voice, often claimed to be useful in lie detection.

Polygraph

A device used to measure and record physiological indicators such as blood pressure, pulse, and skin conductivity while the subject is asked questions, purportedly to detect lies.