Which of the following statements is NOT TRUE?Debt is costlier than equity.For the same business the firm can choose between the use of debt capital versus equity capital.Net profit can be substantially higher if debt is usedAll of the above

Which of the following statements is incorrect?1 pointThe higher the debt-to-equity ratio, the more profit the company has recordedThe higher the debt-to-equity ratio, the more debt the company has on its balance sheetA high debt-to-equity ratio means the company has a lot of debt in relation to equityThe debt-to-equity ratio analyzes the relationship between total liabilities and total equity

Which of the statements is/are wrong?(Баллов: 2)Cost of equity are dividends.Cost of debt is the interest rate.Paid interest on the loan is part of the enterprise's cost. It reduces profit as a basis for calculating the income tax.The cost of equity for the enterprise is lower than the cost of debt.Financial structure reflects the total capital, which finances the company´s assets.Issued shares of company can be ordinary or preference.

Select all that applyWhich of the following statements are true? (Check all that apply.)Multiple select question.An advantage of equity over debt financing is corporations are not required to pay dividends or repay stockholders.Corporations rely more on debt financing than equity financing because debt financing is more plentiful.Corporations rely more on equity financing than debt financing because debt financing is more expensive.Two sources of financing for a corporation are debt and equity.

Which of the following is NOT one of the qualities which makes debt attractive to firms?Select one:a. The required return on debt is lower because, from the lender's point of view, debt is less risky than equity.b. It reduces the amount of corporate tax payable by firms by reducing the amount of taxable profit.c. Debt interest only gets paid when the company is making a profit.d. The cost of debt is generally less than the cost of share capital and hence can lower the overall cost of capital for a firm.

Which one of the following statements is true?Group of answer choicesLow debt ratio means most of the assets are financed by debt.Low debt ratio means most of the assets are financed by equity.Too little debt will reduce the business’s long-term flexibility.High debt ratio means most of the assets are financed by equity.