In Considering Equity and Debt Financing, Which of the Following

Multiple Choice

In considering equity and debt financing, which of the following statements is generally true?

A) The lower the measure of the long-term debt-to-equity ratio, the greater the likelihood the company will have difficulty in meeting its obligation in some future period.
B) Interest and dividend payments are required to be made by the issuing company.
C) The higher the measure of the debt-to-equity ratio, the greater the likelihood the company will have difficulty in meeting its obligation in some future period.
D) Most companies prefer to have no debt and rely exclusively on equity financing.