题目
COMM_V 298 101 102 103 2025W1 Class 1 and 2 Practice Quiz
多重下拉选择题
For each of the characteristics, determine whether they are characteristics of debt financing or equity financing. Company has a legal obligation to pay back the investors: [ Select ] Debt Equity Investors can expect to receive a steady stream of cash flows: [ Select ] Equity Debt The cash flows received may be of varying values: [ Select ] Debt Equity These investors have control over company decisions: [ Select ] Debt Equity These investors are the residual claimants: [ Select ] Debt Equity From the company's perspective, this type of financing is preferred when the company is financially successful: [ Select ] Debt Equity From the investor's perspective, this type of financing is preferred when the company is financially successful: [ Select ] Equity Debt
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标准答案
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思路分析
The task asks us to categorize each statement as debt or equity financing, based on the typical characteristics of each funding type. Below, I analyze each item in turn, explaining why the label is debt or equity and clarifying common misconceptions.
1) Company has a legal obligation to pay back the investors: Debt
- Why this is debt: Debt financing entails a contractual obligation to repay the principal and to make interest payments. The key feature is the legal obligation to repay, which creates a fixed liability for the company. Investors in debt do not typically have ownership or voting rights, but they do have a claim that must be serviced regardless of profits.
- Why not equity: Equity investors are owners and are not guaranteed repayment of their initial investment; they are paid after debt obligations, ......Login to view full explanation登录即可查看完整答案
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类似问题
Which of the following is not a reason that a company would want to issue bonds (debt) instead of stock?
The incentives of equity investors and lenders are well aligned in that both care about improving firms’ long-term value.
Part 1Bonds account for a larger fraction of external funds relative to equities raised by American businesses because:Part 2 A. equity contracts do not permit borrowing firms to raise additional funds by issuing debt. B. costly state verification makes the equity contract less desirable than the debt contract. C. of the reduced scope for moral hazard problems under equity contracts as compared to debt contracts. D. there is no moral hazard problem when using a debt contract.
Part 1Which of the following are differences between a bond and a common stock? (Select all that apply.) A. A bond is a claim on the earnings and assets of a corporation, whereas a common stock promises to make periodic payments for a specified period of time. B. A corporation has to pay all bondholders before paying stockholders. C. A corporation has to pay all stockholders before paying bondholders. D. A bond is a debt instrument that entitles the owner to receive periodic amounts of money until its maturity date, whereas a common stock represents a share of ownership of the institution that has issued the stock.
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