Which of the Following Is NOT a Benefit of Debt

question 23

Multiple Choice

Which of the following is NOT a benefit of debt financing from the acquirer's prospective?

• A)EPS accretion
• B)Tax deductibility
• C)Lack of covenants
• D)Return on equity

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Definitions:

Assets

Resources owned or controlled by a business, providing future economic benefits.

Additional Paid-in Capital

The amount of money shareholders have invested in the company above the nominal value of the shares.

Common Stock

A type of equity security representing ownership in a corporation; holders may receive dividends and have voting rights at shareholders' meetings.

$1 Par Value

The nominal or face value assigned to a share of stock, with no necessary relation to the market value, set at $1 per share.