Which of the following is an accurate statement about the difference between debt and equity?

Question

Quizplus · Accepted Answer

Debt represents borrowed money that must be paid back with interest, while equity represents ownership in the company and does not require interest payments. A is incorrect because equity represents ownership, while debt represents a liability. B is incorrect because interest payments on debt are tax deductible for the issuer, not equity. D is incorrect because financial distress can affect both debt and equity holders, but in different ways.

Which of the Following Is an Accurate Statement About the Difference