Which of the Following Is a Disadvantage to Shareholders of Using

question 30

Multiple Choice

Which of the following is a disadvantage to shareholders of using long-term debt rather than equity?

• A) Interest is tax deductible.
• B) Lenders do not have voting rights.
• C) Lenders do not share in excess profits.
• D) Interest payments must be made on time regardless of a reduction in profitability.

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Definitions:

International Human Capital

The knowledge, skills, and abilities of employees that can be leveraged globally to gain competitive advantage and operate effectively across countries.

Corporate Human Capital

Refers to the collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or the community.

Codetermination

Cooperation between management and workers in decision-making, particularly by the representation of workers on boards of directors.

Decision-Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.