What Is Characteristic of Equity and Debt Financing

question 138

Multiple Choice

What is characteristic of equity and debt financing?

• A) If the long-term debt-to-equity ratio is lower, it is more likely that the company will have difficulty in meeting its obligation in some future period.
• B) Interest and dividend payments must be made by the issuing company.
• C) If the debt-to-equity ratio is higher, it is more likely that the company will have difficulty in meeting its obligation in some future period.
• D) Most companies prefer to have no debt and to rely exclusively on equity financing.

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Definitions:

Federal Racketeering Laws

Laws under the Racketeer Influenced and Corrupt Organizations Act (RICO) designed to combat organized crime by allowing extended penalties for acts performed as part of a criminal organization.

Corporate Campaigns

Organized efforts, typically by unions or activist groups, aimed at applying pressure on a corporation to change its practices or to achieve specific goals.

Apply Pressure

To exert influence or force on someone or something in order to induce a change in behavior or outcomes, often used in political, social, or professional contexts.

Common Situs Picketing

A form of protest where labor unions picket at a common work location shared by multiple employers, often to target a specific employer without disrupting others.