Which of the Following Would Explain Why a Firm Would

question 10

Multiple Choice

Which of the following would explain why a firm would want to sell stocks instead of bonds?

• A) The owners are worried about the burden of debt.
• B) The owners don't want to give up ownership of the business.
• C) The owners aren't trying to finance production.
• D) Stocks are easier to issue than bonds are.
• E) There are more fees associated with issuing bonds.

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Definitions:

Common Stock

A type of security representing ownership in a corporation, with holders possibly entitled to dividends and voting rights.

Transaction

An agreement or exchange between two parties that involves the selling, buying, or trading of goods, services, or information.

Holiday Turkeys

Generally refers to the practice of giving turkeys to employees during the holiday season, which may have tax implications depending on the value and method of distribution.

Employees' Income

The compensation received by individuals for their services performed for employers, including wages, salaries, bonuses, and commissions.