Which of the Following Is NOT an Advantage for a Firm

question 44

Multiple Choice

Which of the following is NOT an advantage for a firm of using equity rather than debt financing?

• A)Lower cost.
• B)Lower risk of insolvency.
• C)Lower funding risks.
• D)No legal liability to pay dividends.
• E)No requirement to repay capital.

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Definitions:

Insurance Crisis

An Insurance Crisis occurs when insurance coverage becomes difficult to obtain, often due to a high demand and low supply, leading to increased premiums and restrictive terms.

Recover Damages

The act of obtaining compensation through legal means for loss or injury.

Licensee

An individual or entity that has been granted permission to engage in an activity or to use property owned by another, typically through a licensing agreement.

Church Services

Ceremonies or worship sessions conducted by a Christian congregation or denomination.