Which of the Following Is a Major Difference Between Debt

Multiple Choice

Which of the following is a major difference between debt financing and equity financing?

A) Equity financing has a specific maturity period, whereas debt financing usually has no specific maturity period.
B) Debt financing is not linked to organizational performance, unlike equity financing.
C) Equity holders have primary claims on assets unlike debt financiers.
D) Payments to equity holders reduce taxable income, whereas debt payments are not tax deductible.
E) Debt financing is used to cover long-term expenses, whereas equity financing is used for current expenses.