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Equity is ________________ (more/less) risky than debt since equity holders receive a ________________?
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- Debt will always have a cost basis that is less than equity. OA. True B. FalseLiquidity is the ability to ______ debts without incurring _____. Similarly, liquidity is the ability to ______an instrument_______enough without incurring_____ price movements.What is the biggest disadvantage to be considered when exploring the option of equity financing versus debt financing?
- Debt financing can enable the return on assets to be greater than the return on equity True False uestionAn attribute of an equity instrument is that: A. it is always issued at par value. B. the holder is not entitled to a fixed-rate return. C. it always confers voting rights upon the holder. D. the holder is entitled to a fixed-rate return.Which of the following is not a reason for the issuance of long-term liabilities? Debt financing dilutes ownership interest. Debt may be the only available source of funds. Debt financing may have a lower cost. Debt financing offers an income tax advantage.
- Credit risk is defined as the inability of _________to meet their debt obligations. For _______the risk includes_____ of principal and interest, cash flow ________, and_________collection costs. Thus, higher credit risk is associated with higher ______ costs.The return which the debt holders get is called Select one: O a. None O b. Dividend O c. Interest O d. Cost O e. Profit O f. Earnings1. Explain what a unsecured debt, subordinated debt, senior debt is? -is there risk in buying an unsecured debt and subsequently having the corp issue a senior debt? - Which types of debt of these would have the lowest interest rate, the highest?
- Straight debt and equity have very different payoff structures. Debt holders get paid "first", but only up to the amount they are owed. Equity holders get paid "last", but essentially get all the upside after the debtholders' obligation has been satisfied. Group of answer choices True FalseTrue (t) or False (f) _____ The accounting for short-term debt investments and for long-term debt investments is similarWhat is the cost of accrued liabilities? If accruals have such a low cost, why don’tfirms use them even more?