Which is true of equity financing?   It has no fixed maturity date It provides a tax shield It offers creditors no cushion against losses Struggling companies still need to pay dividends

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 8DQ: How does the equity method discourage the manipulation of net income by investors?
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  • Which is true of equity financing?

 

  1. It has no fixed maturity date
  2. It provides a tax shield
  3. It offers creditors no cushion against losses
  4. Struggling companies still need to pay dividends
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