Which of the following is an advantage for a firm to issue common stock over long-term debt?

Question

Quizplus · Accepted Answer

Common stock has no maturity date on which the par value of the issue must be repaid, making it a more flexible long-term financing option compared to long-term debt. A and D are incorrect because the cost of equity financing is typically higher than the cost of debt financing, and dividends are not tax-deductible. B is incorrect because the primary claim of equityholders on income and assets in the event of liquidation is a characteristic of equity, but it is not an advantage over long-term debt.

Which of the Following Is an Advantage for a Firm