Which of the Following Would Be a Good Reason to Choose

Multiple Choice

Which of the following would be a good reason to choose to make an equity investment in a corporation rather than lending money to a corporation?

A) The return paid on an equity investment is more secure than the return on debt.
B) The holder of an equity investment always receives a higher return than a debt holder.
C) The holder of equity has the same legal entitlement to receive dividends as a debt holder has to receive interest.
D) The return on equity is riskier than debt but is not fixed and may be higher.
E) It is easier to assess the price of an equity investment.