Explain the advantages and disadvantages of equity financing.
What will be an ideal response?
Answers will vary. For corporations, equity financing comes from two major sources: retained earnings and money directly invested by stockholders who purchase newly issued stock. Equity financing is more flexible and less risky than debt financing. Unlike debt, equity imposes no required payments. A firm can skip dividend payments to stockholders without having to worry that it will be pushed into bankruptcy. And a firm doesn't have to agree to burdensome covenants to acquire equity funds.On the other hand, existing owners might not want a firm to issue more stock, since doing so might dilute their share of ownership. In addition,a company that relies mainly on equity financing forgoes the opportunity to use financial leverage.
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In order to increase the availability of an equipment or system for use, reliability has to ______ with ______ maintainability.
A. decrease; constant B. be constant; decreasing C. increase; constant D. be constant; constant
A holder of goods who is not a seller or a buyer is referred to as a(n) ________
A) consignor B) broker C) bailee D) consignee
If Management was not concerned with the time value of money, from which two capital budgeting methods should they choose?
A. ARR or Payback. B. IRR or Payback. C. BET or NPV. D. NPV or Payback. E. BET or IRR.