Multiple Choice
Why is common stock financing lower risk to the firm than financing with bonds?
A) The lack of a fixed dividend provides the firm greater flexibility versus the interest cost of a bond.
B) Common stock typically has a shorter maturity than bonds.
C) Although common stock dividends are typically fixed, they are usually lower than the interest on bonds.
D) The sinking fund feature on common stock lowers its risk.
Correct Answer:
Verified
Correct Answer:
Verified
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