Which of the following statements is false?
A)Creditors do not have voting power.
B)Payment on interest on debt in considered an expense,while payment of dividends is a return on capital.
C)Unpaid debt is a liability of the firm,and if not paid,can result in liquidation of the firm.Unpaid ordinary equity dividends cannot force liquidation.
D)One of the costs of issuing equity is the possibility of financial distress,while no financial distress is associated with debt.
E)None of the above.

Question

Quizplus · Accepted Answer

The statement that "no financial distress is associated with debt" is false. Debt can lead to financial distress if a company is unable to make payments on its debt obligations, which can result in bankruptcy or other financial problems.

Which of the Following Statements Is False