Equity financing is a popular choice to provide long-term financing for a corporation because:
A) a lender is always available to provide this type of financing.
B) it does not have to be repaid.
C) repayment doesn't have to be made for ten years or more.
D) only interest must be paid for the first five years.
E) it does not cost anything to sell in the primary market.

Question

Quizplus · Accepted Answer

Equity financing does not have to be repaid, in contrast to debt financing which must be repaid with interest. This makes it a popular choice for providing long-term financing for a corporation as it does not create a burden of repayment on the company's financials.

Equity Financing Is a Popular Choice to Provide Long-Term Financing