What is the most obvious difference between debt and equity financing? a. Principal and interest must be repaid for debt financing. b. Dividend payments are mandatory. c. Debt financing can result in loss of control. d. Equity financing is revenue and thus taxable

Q: The line between debt and equity is hard to draw. What does this means?

A: Debt and equity are the two sources from where the company raises finance according to the need.…

Q: eates additional expense without enough benefit through codt savings, income or capital gain, them…

A: Companies use debt in the capital structure because interest on debt is tax deductible and reduces…

Q: This is the type of long-term debt where creditors do not have recourse to the assets of the company…

A: In the field of finance and accounting, there are different types of debt that a company can have.…

Q: If debt creates additional expense without enough benefit through cost savings, income or capital…

A: We know that Debt is the cheaper source of finance, because in income tax interest on debts is…

Q: Financing with Debt Versus Equity. It is commonly understood that the cost of financing a…

A: For any entity, there are two ways of raising funds: Equity Financing and Debt Financing. Companies…

Q: Governments are prevented from borrowing unlimited funds through the enforcement of debt limits.…

A: Debt limit refers to the limit on the debt that a government can borrow. It shows the limits of…

Q: Short-term debt should be excluded in the estimation of WACC if it is a permanent source of…

A: B.'False' is an incorrect answer as WACC full form is the weighted average cost of capital and if it…

Q: Debt will always have a cost basis. that is less than equity. OA. True OB. False

A: Debt - Debt is referred to as the amount of money that is borrowed by one party from another and is…

Q: Unsecured creditors: have rights to be paid amounts owed, but the rights may have to be enforced…

A: Correct option is 1. i.e unsecured creditors have rights to be paid amounts owed, but the rights may…

Q: is not a primary source of long-term debt financing. A. Accounts payable B. Notes payable C. Leases…

A: Long term financing: Long term finance is a financial instrument which maturity more than one…

Q: What are bad debts?

A: Hi Student Since there are multiple questions, we will answer only first question. If you want…

Q: How would the transactions be reconciled if the allowance for bad debt is converted to a bad debt…

A: This question said that The company made the provision or provided for allowance for bad debt as per…

Q: An alternative name for Bad Debt Expense is Select one: O A. Office Expense. OB. Interest Expense.…

A: The entity makes sales on account as well as sales on cash. The company makes sales on account to…

Q: Many types of debt including auto loans, student loans and credit debt are securitized. The…

A: Securitization is the procedure where an issuer designs a marketable financial instruments by…

Q: Which situation is generally a consequence of overly lenient loan repayment terms A. The borrower…

A: The general consequence of overly lenient loan repayment terms will be:Answer: Option C, The…

Q: Please explain one advantage and one disadvantage of financing a company with debt.   Advantage…

A: Advantage: Tax BenefitsOne significant advantage of financing a company with debt is the potential…

Q: Explain what a unsecured debt, subordinated debt, senior debt is?   -is there risk in buying an…

A: Debt is the obligation that requires one party, the debtor to pay money to another party, the…

Q: Positive covenants specify actions a borrowing company must take as part of the indenture. These…

A: The statement is False. Positive covenants, part of a loan's terms, do require the borrower to…

Q: Bonds can be an effective counterbalance in a portfolio heavily invested in stocks. True False

A: Bonds: It is a type of investment wherein the issuer of the bond promises the holder of the bond to…

Q: A debt amortization schedule prepared for each debt and equity is considered a good control. O True…

A: Debt Amortization Schedule: A loan amortisation schedule is a comprehensive table of periodic loan…

Q: True/False and Explain: Josephine says that firms which obtain debt financing by posting collateral,…

A: The objective of the question is to determine whether the statement made by Josephine is true or…

Q: Balance Sheet Insolvency occurs when Liabilities are greater than the Assets resulting in negative…

A: Insolvency Risk: Insolvency risk is a probability that an enterprise cannot satisfy its debt…

Q: What are the general rules for measuring and recognizinggain or loss by both the debtor and the…

A: At the time when restructuring of a loan is taking place, the creditor must compute the loss…

Q: Discuss the theoretical weaknesses of the use of the direct write off method to account for bad debt…

A: There are two main theoretical weaknesses of the direct write off method to account for bad debt…