When considering the cost of financing, that there is no interest cost for most common forms of stock is one benefit of which type of financing?
A) debt
B) interest
C) equity
D) term

Question

Quizplus · Accepted Answer

Equity financing does not involve interest payments because investors receive ownership shares in the company in exchange for their investment. This means that the cost of financing is limited to the dilution of ownership that comes with issuing new shares. In contrast, debt financing requires interest payments on the borrowed funds.

When Considering the Cost of Financing, That There Is No