Which of the Following Is a Reason Why Equity Capital

Multiple Choice

Which of the following is a reason why equity capital is considered riskier than debt capital?

A) Equity capital has a higher priority claim against assets and earnings.
B) Equity capital requires regular periodic payments in the form of dividends.
C) Equity capital expects dividend payments which are not tax-deductible.
D) Equity capital remains invested in a firm indefinitely.