Which of the following statements describes an advantage inherent in equity financing?
A) The company is not required to repay equity.
B) Interest is tax-deductible.
C) A company has an obligation to pay dividends.
D) Equity has a maturity date.

Question

Quizplus · Accepted Answer

Equity financing does not require repayment like debt financing. Investors provide funds in exchange for ownership in the company, so there is no loan to be paid back.

Which of the Following Statements Describes an Advantage Inherent in Equity