What should an organization consider when deciding between debt and equity financing options?
What will be an ideal response?
Answer: Businesses can make money by borrowing money. When choosing between debt and equity financing, companies consider a variety of issues, including the prevailing interest rates, maturity, the claim on income, the claim on assets, and the desire for ownership control.
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Which of the following is least assured for firms that plowback a portion of earnings into the firm?
A) growth in stock price. B) growth in book value of equity. C) growth in earnings per share. D) growth in dividends per share.
Under the RUPA, if Frey died before the partnership terminated,
A. Downs and Vick, as a majority of the partners, would have been able to continue the partnership. B. The partnership would have continued even if Downs and Vick decided not to purchase Frey's partnership interest. C. The partnership would automatically dissolve. D. Downs and Vick would have Frey's interest in the partnership.